Euro under pressure

The euro nursed heavy losses early in Asia on Thursday, having suffered its biggest one-day fall in nearly a year on talk of more easing by the European Central Bank, while commoditycurrencies remained under pressure as risk sentiment took a further dive.

The common currency was at $1.3033, little changed from late trade in New York, where it slid as far as $1.3001 from a high of $1.3200. Its fall of more than 1 percent on Wednesday was the biggest since June 2012.

“The market is generally in a risk off mode. For the euro, $1.3000 is going to be the first line of defense on the downside, that corresponds with the 40-day moving average as well. Below that is $1.2929, the 200-day moving average,” said Sue Trinh, senior currency strategist at RBC in Hong Kong.

Already on the backfoot as European shares fell to their lowest so far this year, the euro took a further hit after ECB Governing Council member Jens Weidmann was quoted by the Wall Street Journal as saying the bank could ease further if economic data warrants it.

“A rate cut in May still looks unlikely on the back of these comments, albeit not impossible should data deteriorate markedly,” analysts at Commonwealth Bank wrote in a client note.

“However, should the economy underperform into the summer, with hoped-for recovery looking more distant, further monetary easing looks increasingly likely. Odds of a June or July rate cut have increased, but ultimately further stimulus remains data-dependent in coming months.”