Euro slips in New York

The euro fell against the dollar and the yen on Thursday with investors expressing caution ahead of Spain's budget presentation at the end of the week amid concerns about the euro zone's sovereign debt crisis. The single currency has declined steadily in recent sessions after touching a nearly four-week high earlier this week on comments from US Federal Reserve Chairman Ben Bernanke, who indicated supportive monetary policy will remain in place.
But with several key risk events for the eurozone in the next few days, investors are squaring positions, said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York. "We've had a few good days for the euro," he said. With a broader bias to sell euros still pervading the market, investors are now booking profits on some of those advances, he added. The euro fell 0.2 percent to $1.3294 after earlier in the session falling to a three-day low. Events in the next few days include Spain's budget presentation, which will show how far the government will tighten its belt, and a meeting of eurozone finance ministers, where policymakers are expected to increase the combined lending ceiling of their two bailout funds.
Spain's budget "is a very dicey game," said Karl Schamotta, senior markets strategist with Western Union Business Solutions in Calgary. An austere document could spur relief in bond markets. Traders said automatic stop-loss sell orders were triggered on the euro's break below $1.33 after the European Commission's economic sentiment index dipped 0.1 percent, with sentiment in industry becoming markedly worse.
Analysts said the euro was unlikely to break out of its recent range of roughly $1.30 to $1.35. The euro fell 0.6 percent on the day to 109.60 yen. The Japanese currency gained broadly on demand linked to the end of Japan's financial year. The yen was up 0.3 percent against the Canadian dollar, up 0.8 percent against the Swiss franc and up 0.2 percent against the pound.
Wednesday was the last day for spot trading in Japan's business year that will end on March 31. But real-money flows from Tokyo kept major currencies under pressure against the yen, with exporters selling the dollar in large amounts, market players said.
The dollar fell 0.5 percent to 82.45 yen and earlier touched a nearly three-week low, triggering reported stop-loss orders on the break of 82.35/40. But many strategists said the dollar should reassert itself against the yen as long as upcoming US data does not support a recent rise in concerns about growth. The growth-linked Australian dollar fell 0.1 percent to USD$1.0376, hurt by concerns about slower growth in China.