Forexpros – The euro was lower against the yen on Tuesday, as fears of a series of downgrades in the European Union continued to weigh while markets eyed the Federal Reserve’s rate decision later in the day.
EUR/JPY hit 102.43 during European afternoon trade, the pair’s lowest since October 6; the pair subsequently consolidated at 102.31, shedding 0.15%.
The pair was likely to find support at 101.66, the low of October 6 and resistance at 103.45, the high of November 24.
Moody’s said Monday it would review ratings of all European Union member states in the first quarter of 2012, while Fitch Ratings said the summit had failed to provide a “comprehensive” solution to the debt crisis.
Meanwhile, concerns over mass euro zone downgrades persisted after ratings agency Standard and Poor’s placed 15 euro zone nations on review for a potential downgrade ahead of the summit last week.
Earlier Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment rose for the first time in ten months in December, edging up to minus 53.8 from last month’s three-year low of minus 55.2.
Meanwhile, Spain’s treasury exceeded its target, selling EUR4.94 billion in 12-month and 18-month bonds at lower yields than at a similar auction last month.
Sentiment was also dented after U.S. data showed that retail sales rose less-than-expected in November, underlining concerns over the faltering pace of the economic recovery in the U.S.
In Japan, Finance Minister Jun Azumi said European leaders should do more to resolve the debt crisis, before asking for funds from the International Monetary Fund.
Elsewhere, the yen was up against the U.S. dollar with USD/JPY retreating 0.09%, to hit 77.86.
Later in the day, the Federal Reserve was to announce its federal funds rate.
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