Euro gains in Asia after upbeat German data

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From International Desk - International Currency News

The euro gained in Asian trading on Wednesday as upbeat German economic data buoyed the unit, but speculation over additional easing measures from the European Central Bank (ECB) capped its rise.

The euro surged briefly on Tuesday after data showed German industrial orders rose unexpectedly strongly in March, by 2.2 percent, propelled by rising demand -- both at home and abroad -- for German-made goods.

That boosted hopes for Europe's biggest economy, but the euro's rise was weighed by expectations of more policy moves from the ECB to stoke the recession-battered eurozone economy, analysts said.

Easing tends to weigh on currencies.

"Euro gains remain bound by the prospect of additional ECB action, particularly the talk of negative deposit rates in Europe. Although we do not see that taking place anytime soon, markets have become more sensitive to data... coming out of Europe," Credit Agricole said in a note.

In afternoon Tokyo trade, the euro fetched $1.3091 and 129.54 yen against $1.3077 and 129.41 yen in US trade on Tuesday.

The dollar, meanwhile, was quoted at 98.95 yen, almost unchanged from 98.96 yen in New York Tuesday afternoon.

The greenback has flirted with multi-year highs above the 100-yen mark in recent weeks, but has yet to breach the psychologically important level.

Markets were also keeping a close eye on Chinese trade data published Wednesday for clues as to the state of the world's second-biggest economy, which has seen a mixed bag of data lately.

China recorded an $18.2 billion trade surplus in April, ahead of expectations and reversing a rare deficit in March as exports rose 14.7 percent year-on-year.

"At first glance the data is encouraging but the figures must be taken with a grain of salt," said Chris Tedder, research analyst at Forex.com in Sydney.

"There is a worrying disparity between different economic indicators from China."

The dollar was mostly lower against other Asia-Pacific currencies.

It slipped to 29.59 Thai baht from 29.65 baht the previous day, to 54.08 Indian rupees from 54.29, and to 40.81 Philippine pesos from 40.89 pesos.

The greenback also slipped to 1,087.71 South Korean won from 1,093.48 and to Tw$29.46 from Tw$29.53 while firming to Sg$1.2313 from Sg$1.2307.

The Australian dollar weakened to $1.0183 from $1.0239, and the Chinese yuan edged up to 16.06 yen from 16.02 yen.


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