Earlier - EUR/CHF (of course this move was inverted, but the true bottom could be seen today).
FOREX-Euro recovers ground; Swiss franc off highs
* Euro up 0.2 pct at $1.4381 ; up 0.6 pct vs yen
* Swiss franc pares gains;, euro at 1.4986 francs
* German Ifo index slightly firmer than expected
* Cross yen pairs rebound on short-covering
(Releads, updates prices, changes dateline prvs TOKYO)
By Tamawa Desai
LONDON, Dec 18 (Reuters) - The euro recovered ground on Friday after steep falls against the dollar and yen, and pared losses against the Swiss franc, which surged earlier in the session in thin trade.
The Swiss franc rose as investors unwound long euro positions in the approach to the year-end, helped by rumours of a coup in Pakistan that were quickly denied and by stop-loss orders which propelled it up. [ID:nLDE5BD0AK]
The euro fell to 1.4910 francs, its weakest level since March when the Swiss National Bank (SNB) intervened to sell francs after announcing steps to fight deflation.
The euro was last at 1.4986 francs , down 0.2 pct on the day.
"The markets are fairly illiquid, which is exaggerating moves," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. "Momentum is key, and you don't want to go against momentum right now."
"There may not be much benefit for the SNB to intervene now, given the markets are so illiquid," he added.
But traders said the euro's rebound against the Swiss franc was partly on expectations the SNB would step in to sell its currency.
The German Ifo institute's sentiment index rose to 94.7 in Decmeber, slightly higher than expectations for 94.5, and up from 93.9 the previous month.
At 0904 GMT, the euro rose 0.2 percent to $1.4381 after falling to $1.4304 on Thursday, its lowest since early September. It had struggled the previous day after S&P became the second rating agency this month to downgrade Greece.
DOLLAR, YEN PRESSURED
The dollar index <.DXY>, a gauge of the greenback's performance against six major currencies, fell 0.1 percent to 77.569, off Thursday's peak of 77.943 which was its highest since early September.
Yen crosses came off their earlier lows on short-covering.
"I get the impression that market players are not wasting time to clean up their positions as we have only a few more days," a hedge fund sales trader for a Japanese bank said.
"Today's move in euro/Swiss, dollar/yen and cross/yen are all part of that last-minute liquidation."
The yen was mildly pressured after the Bank of Japan kept interest rates steady as expected, but in a surprise move, changed its definition of long-term price stability, saying it would not tolerate zero inflation or falling prices. [ID:nT289621]
BOJ Governor Masaaki Shirakawa said the central bank's new definition of long-term price stability did not mean monetary policy will be guided by short-term price moves alone. [ID:nTKU105765]
The dollar was up 0.4 percent at 90.23 yen .
The euro was up 0.6 on the day at 129.76 yen , sterling was also up 0.6 percent at 146.28 yen and the Australian dollar rose 0.5 percent . (Additional reporting by Kaori Kaneko in Tokyo) ((tamawa.desai@thomsonreuters.com; Tel: +44207 542 7018, Reuters Messaging: tamawa.desai.reuters.com@reuters.net, editing by Nigel Stephenson))
Keywords: MARKETS FOREX |
