WORLD FOREX: Euro Hits 4-Month Low Vs Dollar




The euro sank to a four-month low against the dollar Friday in Asia as lingering debt concerns prompted investors to cut their holdings of the currency ahead of next week, when some European nations will issue new sovereign bonds.

During early Asian trading, the single currency fell to $1.2965, its lowest level since Sept. 15. The execution of automated stop-loss orders around $1.2980 fueled selling by Asian sovereign investors, dealers in Tokyo said.

Spanish and Portuguese bond auctions planned for next week prompted investor to take a bearish stance on the euro.

"With European bond auctions coming up, you would certainly feel a bit unconformable holding a lot of euros," said Hideki Amikura, a senior dealer at Nomura Trust and Banking.

While the euro's long-term trend remains downward, investors warned of the euro's upside risk for the rest of the global day Friday.

That's because there is a strong feeling in the market that upcoming U.S. non-farm payrolls data will turn out to be rosy. If the results do not provide a big positive surprise, that would disappoint investors and the greenback will likely face sharp declines as a result.

"The current dollar levels are a product of investors' deep-seated belief that the jobs data will be much better than the market consensus," said Shinichi Hayashi, a senior dealer at Shinkin Central Bank.

A Dow Jones poll of economists predicts a 150,000 job increase in the report for December after adding 39,000 payrolls in the previous month. The data are due at 1330GMT.

The euro was at $1.2986 from $1.3009 in New York Thursday and Y108.40 from Y108.40.

The dollar was at Y83.46 from Y83.36. Shinkin's Hayashi said it may fall to Y82.00 if the data disappoints.

Looking ahead to next week, the greenback may fall further against the yen, possibly below Y82.00, said Barclays Capital's chief Japan strategist Masafumi Yamamoto.

U.S. share prices will be a major factor to look out for, he said. The Dow Jones Industrial Averange ended down 0.22% Thursday, and it may weigh on the U.S. currency if the index falls more sharply.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.950 from 80.825.