Euro slips in Asia

The euro slipped from one-week highs on Thursday after short-covering triggered by Portugal's successful debt auction the previous day ran its course and traders looked to debt sales by Spain and Italy. Portugal's fund raising in the bond market sent bears scrambling to buy back the euro, pushing it above its 200-day moving average, but many hurdles remain for the currency, starting with bond sales by Spain and Italy later in the day.
The euro slipped 0.24 percent on the day to $1.3100, a day after short-covering drove the currency as high as $1.3145, well above its 200-day moving average of $1.3070 and Monday's four-month low around $1.2860. Resistance lurks at $1.3152 for euro/dollar, a 50 percent retracement of the recent fall from around $1.3435 to $1.2870, while the 200-day moving average will provide support.
Talk of Japanese investors' buying also helped to push the euro above 109 yen for the first time in a week. It later slipped to 108.82 yen but remained above the four-month low of 106.83 yen hit earlier in the week. The European Commission and eurozone countries are discussing changes in the size and scope of operations of the European Financial Stability Facility, Economic and Monetary Affairs Commissioner Olli Rehn said.
A recent show of international support for the currency bloc, even if symbolic, is also helping to reduce worries, with both China and Japan providing help. Immediate attention now turns to debt auctions in Spain and Italy, which will also be watched for signs of contagion.
Analysts expect the sales to go without a major hitch, but at elevated costs and there is little change in the view that Portugal will continue to struggle and will ultimately follow Greece and Ireland in seeking aid from the EU and IMF. The dollar index, which tracks the greenback's performance against a basket of major currencies, inched up 0.2 percent on the day to 80.19 after having lost about 1 percent this week.
The dollar moved sideways against the yen at 83.08 yen, holding within the previous session's trading range. The Aussie shed 0.2 percent to $0.9940 after a surprisingly small rise in employment data, though strong commodity prices and the currency's high interest rates limited its losses.