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Little respite for weary euro, US data eyed

TOKYO: The euro remained under pressure in Tokyo on Friday after the European Central Bank kept its interest rates unchanged overnight, crushing hopes of a morale-boosting hike for the struggling currency.

Dealers said the currency may extend its losses if US February employment data due provides fresh signs of the relative strength of the US economy and boosts the dollar.

In late afternoon trade, the euro was quoted at $0.9664/69, compared with $0.9642 in New York late on Thursday.

It briefly dipped as low as $0.9600 in mid-afternoon, but found support on buying by overseas players aiming to protect options positions with strike prices below that level.

Another factor supporting the euro was wariness about the potential for euro-buying, yen-selling intervention by the Bank of Japan in the wake of the yen's recent rise versus the euro. Against the Japanese currency, the euro was at 103.94/04 yen, up from 103.75 yen in New York late on Thursday and Friday's Tokyo intraday low of around 103.24 yen.

The dollar was quoted at 107.63/68 yen, steady from 107.73 yen in New York late on Thursday.

"The euro looks vulnerable, but the market is worried about intervention after overnight talk that the BOJ intervened to buy euros against the yen in Europe (on Thursday), although most people dismissed it as a rumour," said a dealer at a trust bank.

Intervention worries are likely to increase if the euro dips below 103 yen to approach its all-time low near 102 yen set on December 6 last year, dealers said.

"The euro's drop versus the yen is putting indirect downward pressure on the dollar against the yen. But a lot of people were sidelined before the US job data release tonight," the trust bank dealer said.-Reuters