FOREX-Euro halts decline for now, outlook shaky

* Euro pauses but more losses seen on euro zone debt crisis

* Dollar hits one-week low vs yen, stops triggered

* Markets thin with Tokyo shut and holidays looming

(Updates prices)

By Ian Chua

SYDNEY, Dec 23 (BestGrowthStock) – The euro won some reprieve in
Asia on Thursday, having touched a record low versus the Swiss
franc overnight, with traders citing buying interest emerging
from players in the region including central banks.

But the single currency’s outlook remained shaky at best
and more losses into 2011 are seen likely as the euro zone
debt crisis looked set to drag on.

In contrast, the Australian dollar was back at parity
against the greenback thanks to optimism about the global
economy, which has supported commodity prices and
global stocks .

The diverging moves showed investors favoured safe-havens
like the Swiss franc within Europe, but were also keen on
currencies deemed riskier like the Aussie given the generally
more upbeat outlook particularly for emerging economies.

Trading, however, was thin in Asia with Tokyo shut for a
public holiday and as the year-end holidays loomed. Many of
the major currency pairs traded in slim, 20-40 point ranges.

“People have packed up shop really and so we’re seeing
quite whippy ranges,” a dealer at an Australian bank said.

The euro was last at $1.3112 , having traded in a
tight range between $1.3097 and $1.3120. Bids were seen lined
up around $1.3070, and offers around $1.3130/50.

In the past week, the single currency has fallen about 1
percent against the greenback.

Versus the Swiss franc, the single currency bought 1.2457
, having plumbed an all-time low around 1.2448
overnight after options barrier at 1.2500 were taken out,
traders said.

“Our next target for EURCHF is 1.2400,” said BNP Paribas
strategists in a client note. “The CHF is currently driven by
capital rather than trade flows and thus remains well
supported against the EUR as deposit inflows continue.”

The dollar index (Read more about the global trade. ) , which tracks the greenback’s
performance against a basket of major currencies, fell about
0.2 percent to 80.516.

Against the yen, the dollar slid to one-week lows around
83.12 , with traders citing stops being triggered below
83.40. The decline was exaggerated in very thin conditions,
they said.

Despite the fall, the pair is near the middle of a wider
range roughly between 82.30 and 84.50 seen since late November.

Meanwhile, the kiwi last stood at $0.7438, having
recovered from a brief fall below $0.7400 in immediate
reaction to data showing a contraction in the New Zealand
economy for the first time in six quarters. [ID:nL3E6NM1JJ]

“The market was braced for a much worse than expected
number,” said Sue Trinh, currency strategist at RBC Capital
Markets in Hong Kong.

“Markets have gotten very bearish on the kiwi over the
past couple of weeks especially after the warning from S&P
rating agency.”

The recovery in the kiwi knocked the Aussie off a 10-year
high of NZ$1.3505 set just after the NZ GDP data.
The pair last traded at NZ$1.3453.

Against the greenback, the Aussie was at one-week highs
around $1.0017 .

(Additional contribution by Reuters analyst Krishna Kumar in
Sydney; Editing by Balazs Koranyi)

FOREX-Euro halts decline for now, outlook shaky