* Yen under pressure as safety demand eases
* Markets still keeping a wary eye on geopolitical
By Ian Chua
SYDNEY, Aug 11 The yen nursed losses early on
Monday after coming under pressure late last week as a slight
easing of geopolitical tensions dampened demand for the
safe-haven Japanese currency.
The dollar bought 102.13 yen, having bounced off
Friday's two-week trough of 101.51. The euro fetched 136.88 yen
, well off an 8-1/2 month low of 135.73.
News on Friday that Russia was ending military drills near
the Ukrainian border helped U.S. stocks post their best
one-day gain since March.
That in turn lifted hopes that Asian stocks
can also rebound from their biggest weekly fall in over four
In a further boost to risk sentiment, Israel and the
Palestinians agreed on Sunday to an Egyptian proposal for a new
72-hour ceasefire in Gaza starting at 2100 GMT.
"The conclusions from the weekend are that conflicts are
cooling, and the risk-off events of the past two weeks may see
upside risk as de-escalation spreads across the conflicts," said
Evan Lucas, strategist at IG in Melbourne.
With little in the way of major economic data out of Asia on
Monday, markets will continue to watch these geopolitical
However, some traders warned that investors could quickly
turn risk averse again given how volatile the situation is
between Russia and Ukraine.
In the meantime, the euro clung onto most of the gains made
on Friday. It traded at $1.3405, having climbed 0.3
Commodity currencies also enjoyed a bit of a reprieve with
the Australian dollar at $0.9275, off a two-month low
of $0.9239 plumbed on Friday.
Aussie bulls were still recovering from last week's setback,
first from a shock jump in the country's jobless rate and then a
downgrade in the central bank's forecasts for economic growth.
In contrast, the Bank of England could upgrade Britain's
growth prospects in a closely watched inflation report due on
That could help support sterling, which on Friday slumped to
an eight-week trough on the dollar and a six-week low
on the euro.
(Editing by Shri Navaratnam)