Dollar, Yen Rise Amid Risk Aversion

22:59, 12th November 2012

(RTTNews) - The U.S. dollar and the Japanese yen strengthened against other major opponents in the early Asian session on Tuesday as Eurozone finance minsters kept Greece bailout on hold and worries about U.S. cliff intensified, prompting investors to seek safe-haven assets.

At the meeting in Brussels, Eurozone finance ministers were unable to reach consensus regarding disbursement of next installment of bailout funds to Greece.

Eurogroup head Jean-Claude Juncker told that the final decision may be reached next week, when the group meets again to lay down final details to grant EUR 31 billion financial aid to Greece.

The meeting decided to give two year extension to debt laden country to meet its austerity requirements.

U.S. law makers are struggling to avoid "fiscal cliff" that refers to various tax hikes and budget cuts set to take into effect at the beginning of January, which if not negotiated may derail the economy.

The yen hit more than a 4-week high of 125.97 against pound from a previous low of 126.46. If the yen rises further, it may target 125.50 level.

Against the euro and the franc, the yen climbed to 4-day highs of 100.68 and 83.57, off its early lows of 101.22 and 84.01, respectively. On the upside, the yen is likely to break 100.00 against the euro and 83.00 against the franc.

The yen that rebounded from early multi-day lows of 79.67 against the loonie, 83.07 versus the aussie and 65.17 versus the kiwi is now worth 79.40, 82.68 and 64.86, respectively. The yen is likely to find next resistance level at 79.00 against the loonie, 82.5 against the aussie and 64.00 against the kiwi.

Food prices in New Zealand were down 0.6 percent on month in October, Statistics New Zealand said today, after dipping 0.9 percent in September.

On a yearly basis, food prices were up 0.3 percent following the 0.3 percent contraction in the previous month.

After falling to a 5-day low of 79.65 against the greenback in early deals, the yen rose and the pair is trading at 79.43. The yen may target next upside level at 79.00.

The U.S. dollar also gained, hitting as high as 1.0007 against the Canadian dollar, 1.0405 against the aussie and 0.8165 against the kiwi. The greenback closed Monday's deals at 1.0000 against the loonie, 1.0431 against the aussie and 0.8178 against the kiwi.

The greenback spiked up to more than 2-month highs of 0.9508 against the franc and 1.2678 against the euro with 0.955 and 1.26 seen as the next upside target levels, respectively.

Against the pound, the greenback advanced to 1.5863 for the first time since September 5. If the greenback rises further, it may target 1.58 level.

Looking ahead, Japan final industrial production for September is expected shortly.

In the European session, Swiss producer & import prices, U.K. CPI and PPI - all for October, German ZEW economic sentiment index for November are due for release.

The U.S. monthly budgetary statement is expected in the New York session.