Forexpros – The U.S. dollar edged lower against the yen on Tuesday, as safe haven demand strengthened after Standard & Poor’s threatened to downgrade 15 euro zone countries if no progress was made on the region’s debt crisis.
USD/JPY hit 77.68 during late Asian trade, the pair’s lowest since December 1; the pair subsequently consolidated at 77.76, edging down 0.07%.
The pair was likely to find support at 77.47, the low of December 1 and resistance at 78.09, the high of December 5.
S&P put the long-term sovereign-debt ratings of 15 euro zone members, including Germany, Italy and Spain on negative watch and flagged a potential two-notch downgrade for France.
This means that there is a 50% chance of a downgrade within 90 days but the firm said it plans to announce any ratings changes “as soon as possible” after this week’s European Union summit.
The warning came after German Chancellor Angela Merkel and French President Nicolas Sarkozy unveiled a common platform that aims to halt the region’s debt crisis. The plan calls for automatic penalties for deficit violators and locking limits on debt into euro zone states’ constitutions.
Meanwhile, the yen was higher against the euro with EUR/JPY declining 0.35%, to hit 103.93.
Later in the day, the euro zone was to produce revised data on gross domestic product, while Germany was to publish official data on factory orders.
Forexpros
