* Euro inches up after falling overnight on weak data
* Single currency in consolidation phase -analyst
* Aussie rebounds after previous day's drop
By Masayuki Kitano
SINGAPORE, Sept 21 The euro clawed higher on
Friday, but its gains were limited after a batch of surveys
showed euro zone business activity remained weak despite the
European Central Bank's bold efforts to tackle the debt crisis.
The euro rose 0.1 percent to $1.2986, getting some
respite after having dipped to as low as around $1.2920 the
Immediate support is seen near $1.2905, the 23.6 percent
retracement of its rally from a two-year low of $1.2042 hit in
late July to a four-month high near $1.3173 hit on Monday.
"From here we continue with the waiting game and we just see
what happens in Europe," said Gareth Berry, G10 FX strategist
for UBS in Singapore.
"Two key questions. When is Spain going to ask for help, and
will Greece be given the time and the money to effectively
disappear off the radar screens for another six months or so,"
Negotiators discussing Greece's bailout came closer to an
accord in late night talks on Thursday but are still short of a
final deal that would unlock the next instalment of Greece's
31.5 billion-euro bailout package.
Many market players expect Spain to eventually apply for aid
and trigger the European Central Bank's bond-buying programme
aimed at lowering the borrowing costs of stressed euro zone
states, although investors' patience could be tested if Madrid
The ECB's bond-buying plan and the Fed's launch of a new
asset buying programme have given a boost to the euro this
month. Signs of persistent weakness in the euro zone economy,
however, have taken some of the shine off of the euro's recent
Surveys showed on Thursday that the ECB's aggressive new
bond-buying plan has so far failed to inspire any major
improvement in business at ailing euro zone companies.
For now, the euro seems to be in a consolidation phase
rather than being on the cusp of returning to a bearish trend,
said Roy Teo, senior FX strategist for ABN AMRO Bank in
"I think the euro should find some support around the
$1.2755 level," he said. A drop below that support could open
the way to a deeper drop, but as long as it holds, the euro
could rise toward a peak hit in May of $1.3284, Teo said.
The Australian dollar rose 0.3 percent to $1.0468.
The Aussie dollar also gained ground on the euro, with the euro
slipping 0.2 percent to A$1.2401.
There had been some stop-loss offers in the euro/Aussie near
support at the euro's 200-day moving average, which the euro
breached on Friday, said a trader for a major Japanese bank in
Singapore. That 200-day moving average now lies at A$1.2412.
The U.S. dollar eased 0.1 percent to 78.16 yen,
staying well below a one-month high of 79.23 yen hit on
Wednesday after the Bank of Japan boosted its asset-buying
programme to help fuel the country's economic recovery.