FOREX-Euro struggles to defend support amid debt fears

* Euro seen vulnerable as debt concerns remain

* Single currency near record low vs Swiss franc, Aussie

* Aussie keeps gains on strength in commodities

TOKYO, Dec 21 (BestGrowthStock) – The euro remained on the defensive
on Tuesday, barely clinging to its 200-day moving average on
simmering fears that some euro zone countries and banks could
face more borrowing strains.

Moody’s said on Monday it may cut the ratings on Spanish
banks following its multi-notch downgrade of Ireland’s credit
rating last week. Speculation has risen that France and Belgium
may also face cuts. For more, see [ID:nLDE6BJ1G1]

“Nothing has really changed on the dire fiscal conditions in
Europe. The euro will likely test $1.30 and head for $1.25 soon,
if not before the year-end,” said Daisuke Karakama, market
economist at Mizuho Corporate Bank.

The euro changed hands at $1.3120 (EUR=: ), hovering just above
its 200-day moving average at $1.3102, a break of which could
enhance bearish sentiment.

The next possible downside target is seen at $1.30, followed
by the December low of $1.2970, traders said.

On the upside, it will likely face resistance around the
$1.3165-80 zone, which had been major support for the currency.

The euro also stayed within striking distance of a low of
1.2636 Swiss francs (EURCHF=EBS: ) hit on trading platform EBS on
Monday, its weakest since the euro’s launch in 1999.

The single currency stood just above a record trough against
the Australian dollar (EURAUD=R: ).

Firm commodity prices have underpinned the Australian dollar,
as the Reuters-Jefferies CRB index (.CRB: ) hit two-year highs.

The Australian currency kept most of its gains made on the
U.S. dollar in the past three sessions, changing hands at $0.9933
(AUD=D4: ).

The next targets could include $0.9950 and $0.9980, 61.8 and
76.4 percent retracements respectively of its pullback last week
from above parity.

The immediate focus is on the minutes of the Reserve Bank of
Australia’s policy meeting due at 0030 GMT.

The dollar was little changed against the Japanese yen at
83.78 yen (JPY=: ).

No policy change is expected at the Bank of Japan’s two-day
policy meeting that ends on Tuesday.
(Reporting by Hideyuki Sano, additional contribution from
Reuters Analyst Krishna Kumar in Sydney; Editing by Joseph
Radford)

FOREX-Euro struggles to defend support amid debt fears