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LSE: Euro hits 3-week low vs dollar; Swiss franc falls
 
By Wanfeng Zhou

NEW YORK, Dec 23 (Reuters) - The euro fell to a three-week


low against t


he dollar on Thursday amid persistent concern

about debt troubles in Europe, though analysts said strong

technical support levels could limit near-term downside.

The euro earlier fell to around $1.3050, below its 200-day

moving average currently located at $1.3092 on trading platform

EBS. Investors have pushed the euro beneath this key support

level for the past three sessions, only to see the currency

bounce back later in the day.

Analysts said the euro will likely hold above $1.30 in the

coming days, with traders reluctant to place big bets before

year-end. The outlook for the single currency remains shaky,

with fresh losses expected into 2011, they added.

The Swiss franc weakened broadly as investors booked

profits on a rally had seen the Swiss currency hit record highs

versus the euro for six consecutive days. The euro zone debt

crisis has prompted investors to flock to the safe-haven Swiss

franc in recent weeks.

U.S. economic data showing a small drop in weekly jobless

claims and a smaller-than-expected rise in consumer spending

had little impact on the dollar. With liquidity thinning ahead

of year-end, traders said flows were having a bigger impact on

price than fundamentals.

'We are looking for euro/dollar stability above 1.30 moving

in to the end of the year,' said Sacha Tihanyi, currency

strategist at Scotia Capital in Toronto.

'With the late November and early December tests at that

level, and the subsequent failure of euro/dollar to sustainably

break below, I'd say that 1.30 looks like strong support,' he

added.

In early trading, the euro was down 0.3 percent at $1.3066 , after having dropped as low as $1.3055 on EBS, and

was on track for a weekly loss of about 0.9 percent.

The euro had earlier risen after a Chinese Foreign Ministry

spokeswoman said China was willing to help countries in the

euro zone return to economic health and would support the

International Monetary Fund bailout package for the bloc. For

more, see

On Wednesday, the Jornal de Negocios daily reported that

China was looking to buy between 4 and 5 billion euros of

Portuguese sovereign debt to help the country ward off pressure

in bond markets.

'To have any discernible effect China will have to buy a

lot more than 5 billion euros if they expect to have any impact

on the negative sentiment surrounding Europe,' said Michael

Hewson, currency analyst at CMC Markets.

The euro was up 0.8 percent at 1.2560 Swiss francs , after hitting an all-time low of 1.2440 on trading

platform EBS on Wednesday.

'As long as there are periphery concerns in the euro zone,

a lower euro/Swiss is very hard to fight,' Lignos said.

A North Korean minister saying his country was prepared to

wage a 'holy war' against the South using its nuclear deterrent had no discernible impact on major currencies.

The dollar fell 0.6 percent to 83.06 yen in

thinned trade with Tokyo closed for a national holiday and

ahead of the Christmas holidays in the United States and

Europe.

Support at the top of the Ichimoku cloud gave way in Europe

at 83.08 yen. The base of the cloud was seen as the next

support, at 82.07 yen. Bids were seen around 82.80 yen.

(Additional reporting by Neal Armstrong in London; Editing by
Source