Euro holds firm as market awaits data

[1]

The euro held firm against the dollar in Asia on Monday as investors opted to sit and wait for upcoming data.

The single currency, which lost ground Friday on weak European economic figures, stood at $1.3199 in Tokyo afternoon trade compared with $1.3196 in New York late Friday.

Against the Japanese unit, the euro edged down to 107.70 from 107.93 in New York. The dollar slipped to 81.60 yen from 81.78 yen.

"Investors may take some time out from Europe/Greece watching this week to focus on the data," National Australia Bank said in a note.

The 10-day gathering of China's National People's Congress got under way in Beijing, with Premier Wen Jiabao setting a growth target of 7.5 per cent for 2012, lower than last year.

European and US services indices are due later Monday and China's inflation data is expected on Friday. US jobs data are also to be released on Friday.

"The week ahead is chock full of event risk. Given this, and the still uncertain global environment, there is a good chance we (will) finally see market volatility begin to rise from current low levels," National Australia Bank said.

Sumino Kamei, senior analyst at the Bank Of Tokyo-Mitsubishi UFJ, said concerns over the eurozone crisis were rekindled after the Spanish government raised its budget-deficit target to 5.8 per cent of gross domestic product for 2012. The previous target was 4.4 per cent.

The European Central Bank's governing council is to meet in Frankfurt on Thursday for its regular monthly policy-setting meeting.

It is not expected to announce any changes to interest rates or other major measures until it is able to assess the impact of recent moves to flood the banks with cash to avert a credit crunch, analysts said.

It pumped a record 529.5 billion euros into European banks last week. The dollar climbed against Asian currencies.

It rose to Sg$1.2556 in Tokyo afternoon trade from Sg$1.2486 on Friday, to 42.83 Philippine pesos from 42.67 pesos, and to 1,117.60 South Korean won from 1,115.50 won.

The dollar also went up to 9,120.00 Indonesian rupiah from 9,118.00, to 30.62 Thai baht from 30.48 baht and to Tw$29.48 from Tw$29.41.