Euro remains down

The euro slipped for a second straight session on Wednesday as euro-zone debt worries mounted one day ahead of a bond sale in Spain, seen as a test of Madrid's capacity to grapple with financial and budgetary pressures. The euro was further pressured by a rise in sterling, which posted the biggest gains among the major currencies.
The British pound rallied after minutes showed the Bank of England expressed concern that high inflation could persist into the medium term. One BoE policymaker dropped his long-standing call for more stimulus. A fall in Spanish shares also weighed on the euro. Some strategists said comments from European Central Bank policymaker Jens Weidmann that countries should not expect the central bank to tackle rising debt yields by buying government bonds prompted the weakness in stocks.
"Spain right now has a liquidity problem, but it's not yet a solvency problem," said Dan Dorrow, head of research at Faros Trading in Stamford, Connecticut. In late afternoon New York trading, the euro slipped 0.1 percent against the dollar to $1.3114, recovering on corporate buying and minor positioning ahead of the Spanish auction, traders said. The euro last week briefly hit a two-month low below $1.3000.
The euro's intraday bias against the dollar, however, remains neutral for now, analysts at ActionForex.com said, given that it has stayed within the $1.2994-$1.3212 range. But ActionForex said a fall below $1.2994 will extend the decline from the $1.3486 multi-month high hit in February to the $1.2625 low struck in mid-January. A break of $1.3212, however, suggests that the choppy decline from $1.3486 is merely a correction and is now complete, the analysts said. ActionForex said the bias will then revert to possible gains to $1.3385 and an eventual re-test of that $1.3486 peak.
The euro has struggled to rise above $1.32 since early April. CitiFX Wire said in a note that its traders were looking to buy the range-bound currency on dips. The euro was last down 0.7 percent against the pound to 81.83 pence, at one point falling to its lowest since August 31, 2010, according to Reuters data, and below reported options barriers at 82 pence. Against the Swiss franc, the euro was up slightly at 1.2018 francs. Market participants were on the alert for any action from the Swiss National Bank to weaken the franc.
The dollar rose 0.5 percent against the yen to 81.23 yen. The euro traded up 0.4 percent on the day at 106.55 yen, holding above Monday's low below 105 yen. The yen weakened further after Bank of Japan deputy governor Kiyohiko Nishimura said on Wednesday the central bank was ready to ease policy further if necessary to help Japan's economy recover.