Euro down ahead of Spain and Italy debt auctions

TOKYO — The euro eased against other major currencies in Asia on Wednesday amid caution ahead of debt auctions by struggling Spain and Italy.

The euro edged down to $1.2744 and 98.01 yen in Tokyo morning trade from $1.2775 and 98.15 yen in New York late Tuesday. The dollar was at 76.87 yen against 76.80 in New York.

Caution grew ahead of bond auctions planned by debt-ridden Spain and Italy on Thursday, said Junichi Ishikawa, forex analyst at IG Markets Securities.

The euro received some support after Fitch Ratings said Tuesday it was unlikely to cut its triple-A rating on France this year.

But “there are many in the market who think a downgrade by other ratings firms may come” as early as this month, Ishikawa told Dow Jones Newswires.

The euro fell to a new 16-month low of $1.2666 in New York on Monday.

The market calm on Wednesday was “an uneasy truce”, National Australia Bank said in a note.

The bank noted investors were waiting to see progress on private sector involvement in cutting Greek debts, the Italian bond yields and other aspects of the European crisis.

“These event risks are ongoing, and as we know, are not easily solved,” it said.

Negotiations between Greece and banks on a debt writedown will be wrapped up shortly, European Union economic affairs chief Olli Rehn said on Tuesday.