ForexLive Asian market wrap: EUR/USD makes fresh two-year low

EUR sentiment was negative on reports that the ECB would reject Bankia bailout plans Reports on the LTRO during late NY trade also weighed on EUR sentiment Official Chinese press reports that China had no plans for large-scale stimulus also hurt risk sentiment Greek poll results putting the pro-austerity party slightly ahead did nothing to help the EUR Australian retail sales fell by 0.2% MoM Japan's May manufacturing PMI was unchanged from last month at 50.7 BOJ Yamaguchi: Not ruling out further monetary easing South Korea's Aprilo current account surplus was $1.6 billion, down by 50% from last month Regional sharemarkets fall by over 1% on soggy risk sentiment, especially regarding Spain Gold $1553/oz; Oil $90.50/bbl EUR/USD posted a low at 1.2461 in NY but bounced quite sharply on some late short covering to close above 1.2500. Sentiment was immediately soured on the reports that the ECB would reject the Spanish government plans on how to bail-out the embattled Bankia bank. The Greek poll results failed to turn sentiment around and the EUR/USD has slid slowly lower, hitting session lows at 1.2456 just after the disappointing Australian sales data. Turnover has been quite large with decent sized bids getting filled in near 1.2470/75. A large barrier is reported at 1.2450. Ranges: 1.2456/1.2503 The AUD has of course been affected by the poor risk sentiment created by the Spanish banking news mentioned above and the Chinese press reports on the lack of major stimulus plans. The poor retail sales data was the final straw, sending the AUD/USD back under .9800. Dip buyers were plentiful in AUD/USD and AUD/JPY just after the data. Interbank dealers are now looking for the Monday morning 'gap' to .9750 to be closed. Ranges: .9771/.9843 USD/JPY has had a very tight range, only moving on cross flows and ignoring the BOJ comments and the economic data. Ranges: 79.45/55 Cable 1.5608/37; EUR/GBP .7975/89