The euro rose against the dollar and yen Friday in Asia but traders said the moves are due to year-end position adjustments and any gains should be short-lived.
While investors remained pessimistic about the outlook of European debt problems and the common currency, they have started to prepare for the year-end holiday season.
Traders said their adjustments were mostly squaring stocked-up dollar-buying, euro-selling positions.
"They have played enough for this year, and it's time to get ready for Christmas," said Hiroshi Maeba, a senior dealer at Nomura Securities.
The euro was at $1.3033 from $1.3016 in New York Thursday and ¥101.50 from ¥101.35.
Looking beyond the holiday season, Barclays Capital's chief currency strategist Masafumi Yamamoto said the euro will resume its declines as the debt problems are far from over.
"Yields on European sovereign bonds such as Italy's remain at a level of risk, and investors are still concerned about capital shortage of euro-zone financial firms," he said.
Later in the day, Italian policy makers will vote on an approval of fiscal austerity plans, and Yamamoto said "that is really the only one important economic event of the global day."
Meanwhile, the dollar was at ¥77.87 from ¥77.85, and the ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 80.181 from 80.286.
Citibank Japan's chief currency strategist Osamu Takashima said year-end needs for dollar-funding, which is also visible in the higher dollar Libor, was supporting the greenback.
Elsewhere, analysts said the recent decline in the Indian rupee was worrisome because it suggests the nation's economy is weakening.
read more: Olympus Wealth Management
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