Forex – EUR/USD nicks down in early Asian trade

Forexpros – The euro edged lower against the U.S. dollar in Asian trade Friday, following an upbeat U.S. labor report and a series of stabilizing European developments that served to ease market concerns on regional debt.

EUR/USD hit 1.3598 in early Asian trade, the pair’s lowest since Wednesday; the pair subsequently consolidated at 1.3602, shedding 0.05%.

The pair was likely to find support at 1.3395, the low of September 10, and resistance at 1.3859, Wednesday’s high.

Surging Italian government bond yields that startled the market Wednesday abated, with yields on an auction of Italian government bills falling to 6.9% on Thursday from 7%, the rate at which Greece initiated requests for debt aid.

Market analysts forecast that the record high yields on Italian bonds were unsustainable and that if the country were to quickly name a successor to Prime Minister Silvio Berlusconi, it would further ease market anxieties over an Italian financial collapse.

Former European Commissioner and economist Mario Monti, emerged as the front-runner to replace Berlusconi who reportedly told Italian news sources that a Monti-led government appeared inevitable.

In Athens Thursday, Greece’s new coalition government agreed to name former European Central Bank Vice President Lucas Papademos as the country’s new prime minister.

Meanwhile Thursday, rating’s agency Standard & Poor said that it had not reduced France’s debt rating from its current AAA, clarifying an earlier transmission to subscribers as a technical error. S&P said France remained on its highest investment grade with a “stable” outlook.”

Later Thursday, the U.S. Department of Labor reported that the number of Americans filling for unemployment assistance fell to a seven-month low, down 10,000 to a seasonally adjusted 390,000 for the week ending November 4.

Market expectation were for jobless claims to reach 400,000 for the period.

Wall Street dealers snapped up oversold U.S. issues from the previous session following news from Europe, with the Dow Jones Industrial Average adding 0.94% to 11,891.70, the Nasdaq Composite Index rose 0.13% to 2,635.15, and the S&P 500 advanced 0.86% to close at 1,239.70.

European markets closed mixed by the end of Thursday’s session, with France’s CAC shedding 0.34% to 3,064.84, Britain’s FTSE 100 fell 0.28% to 5,444.82, while Germany’s DAX picked up 0.66% to 5,867.81.

Meanwhile, the euro was lower against both the British pound and the Japanese yen, with EUR/GBP down 0.06% to hit 0.8538, and EUR/JPY lower by 0.09% to hit 105.64.

The University of Michigan was due to release its latest consumer sentiment index later Friday.