Euro hovers near one-week low versus dollar

The euro remained near one-week lows versus the dollar in Wednesday’s early Asian trading, pressured by ongoing uncertainty over Spain’s lack of urgency in requesting a financial bailout.

On Tuesday, protesters and police clashed in the Spanish capital, Madrid, as the stricken country got ready for a fresh wave of austerity measures in next year’s budget. In addition to the Spanish uncertainty weighing on the single currency, a German newspaper published an article claiming that Germany’s Bundesbank and the European Central Bank are having lawyers check the ECB’s new bond buying programme’s legality.

GFT market strategist Neal Gilbert said that against this current backdrop, investors are likely to be looking towards safe havens. He explained that the Asian trading session will continue on from the second half of Tuesday’s US trading session, meaning downward price action, especially in the euro crosses.

The common currency went down by around 0.1 per cent to $1.2897 after falling to as low as $1.2886 the previous day, the lowest it has been since 13 September. It continued its descent from a four-month peak of $1.373 reached on 17 September. The currency also fell by around 0.1 per cent to 100.30 versus the yen, although remained higher than Tuesday’s low of 100.17 yen.