* Euro descends to new 12-year low of $1.0457 early in Asia
* Momentum still bearish a week after ECB kicked off QE
* Canadian dollar holds near six-year trough as crude oil
(Adds details, quotes)
By Ian Chua and Shinichi Saoshiro
SYDNEY/TOKYO, March 16 The euro sank to a fresh
12-year low on Monday after a recent bounce was met with fresh
selling interest in a sign that investors were still very
bearish on the common currency.
The euro fell as far as $1.0457 early in Asia, its
lowest since January 2003, after a brief bounce above $1.0600
overnight. It last traded at $1.0524.
"While we have hit our mid-year EUR/USD target of 1.05...we
see no reason to fade the downtrend," said Elsa Lignos, senior
currency strategist at RBC Capital Markets.
"Our technical team highlights rallies to resistance at
1.0765 as a selling opportunity, targeting 1.0073."
Last week, the common currency skidded 3.2 percent,
suffering its biggest weekly fall since September 2011 as the
European Central Bank kicked off its 1.1 trillion euro
bond-buying quantitative easing (QE) stimulus program.
Against the yen, the euro fetched 127.66, holding
near a 21-month trough of 126.85 set on Friday.
Persistent weakness in the euro helped the dollar index
stretch to a 12-year high of 100.420 in early trade. It
was last at 100.030.
The greenback was flat on the yen at 121.32, though
it remained within striking distance of a near eight-year peak
Data from the Commodity Futures Trading Commission on Friday
showed currency speculators piled onto long dollar bets in the
week ended March 10.
Partly underpinning the move is expectations that the
Federal Reserve will soon raise interest rates. Many analysts
suspect the Fed will lay the groundwork for a move as soon as
midyear at this week's policy review.
"At the review we expect the Fed to drop 'patient' and send
a message that it is ready to hike rates depending on economic
data. Against such a background, the euro remains the most
vulnerable versus the dollar," said Shinichiro Kadota, chief
Japan forex strategist at Barclays in Tokyo.
"ECB's QE continues to take a toll on the euro. Euro zone
bond yields were thought to have mostly priced in the QE launch
beforehand, but the magnitude of their decline has shown that
such expectations were premature," he said.
Just one week into its launch the QE programme effectively
floored yields on most euro zone debt, leaving many at record
lows and in many cases at negative levels.
Participants saw room for euro zone yields to decline
further as the QE programme will last until September 2016.
Among commodity currencies, the Canadian dollar languished
at six-year lows as a combination of U.S. dollar strength and
falling oil prices weighed heavily on the currency.
The loonie stood at C$1.2797 per USD, flirting with
Friday's six-year trough of C$1.2824 per USD.
Extending heavy losses suffered last week on the dollar's
broad strength and warning by the International Energy Agency of
a growing oil glut, U.S. crude oil slipped to a six-year
low of $43.57 a barrel.
(Editing by Sandra Maler & Shri Navaratnam)