EU focus: Euro's upside limited
12.01.2011, 12:00

EU focus: Euro's upside limited

The euro erased its advance against the dollor to trade little changed at $1.2975 as of 11:09 a.m. in London. It earlier reached $1.3046.
BNP Paribas strategists said they expected the euro's upside to remain limited at the $1.3000/40 area, which will provide renewed selling opportunity with a target for a break below $1.2875 and then $1.2590.

The dollar index, which tracks the performance of the greenback against a basket of major currencies, was little changed at 80.824 , off a five-week high around 81.313 set on Monday.
Meanwhile, the Australian dollar hit a fresh one-month low around $0.9803, before limping back to $0.9825, having tested Fibonacci support at $0.9811 -- a level representing the 61.8 percent retracement of the December rally.
Mounting worries the massive floods in the country's northeast could hamper growth were taking a toll on the Aussie, knocking the currency well off a 28-year high around $1.0250 set on Dec. 31.
Warren McKibbin, a Reserve Bank of Australia board member, was quoted in the Sydney Morning Herald as saying the floods could cut up to 1 percentage point from economic growth.
Estimates from bank economists were less grim, though, with many expecting the floods could at most knock 0.5 percentage points off growth.

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