Forex - EUR/JPY drops on Moody's downgrades

Published 02/13/2012, 10:22 PM
Updated 02/13/2012, 10:24 PM
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Investing.com - The euro fell against the yen on Tuesday after U.S. ratings agency Moody's downgraded six European nations and threatened to follow suit with three more.

In Asian trading on Tuesday, EUR/JPY hit 102.11, down 0.18%, up from a session low of 101.84 and off from a high of 102.36.

The pair was likely to find support at 101.84, the earlier low, and resistance at 103.18, Monday’s high.

In the U.S., Moody's said it was downgrading sovereign ratings for Italy, Portugal, Spain, Slovakia, Slovenia and Malta, and slapped negative outlooks on Austria, France and the U.K., which ups the likelihood the latter three countries could lose their coveted AAA ratings.

The move extinguished any appetite for risky stocks and other assets made attractive by a recent Greek parliamentary vote in favor of austerity for aid.

The euro fell against most major currencies, with the yen acting as a safe harbor alongside the greenback.

The euro, meanwhile, was up against both the pound but down against the dollar, with EUR/GBP gaining 0.14% to 0.8376 and EUR/USD losing 0.24% at 1.3156.

Later Tuesday, the Bank of Japan is tentatively scheduled to give a press conference to discuss monetary policy.

French nonfarm payroll numbers are due out, while in Germany, the German ZEW Economic Sentiment index will be released.

Market watchers will keep an eye on eurozone industrial output figures and even more so on U.K. inflation data.

In the U.S., retails sales, import price figures and business inventory data will emerge, while Treasury Secretary Timothy Geithner is set to speak.

New Zealand is due to release retail sales data, while in Australia, the Westpac Consumer Sentiment Index will hit the wire.



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