Euro stabilizes, Aussie weakens in Asia on business confidence outlook by NAB

On Tuesday the euro steadied as markets digested Syriza's pledge to renegotiate the terms of Greece's €240 billion international bailout.

The Australian dollar traded weaker in Asia on a mixed business confidence and conditions outlook by National Australia Bank (NAB).

AUD/USD traded at 0.7906, down 0.24%, while USD/JPY changed hands at 118.57, up 0.10. EUR/USD fell 0.03% to 1.1233.

The NAB's Business Conditions and Business Confidence for December showed conditions up 4 last month from up 5 in November and confidence at up 2 from up 1 in November.

The November poll saw decline in both confidence and conditions, with confidence at the lowest level since the pre-election jump in mid-2013. The mixed December data is likely to encourage the market to increase pricing for a near-term RBA cash rate cut from the current record low 2.5%.

Japan's service producer price index rose 3.6%, in line with the median forecast for a gain of 3.6%.

The greenback slipped moderately lower overnight against the other major currencies, as concerns sparked by anti-austerity Syriza party's victory in Sunday's Greek elections continued to subside in relatively quiet trade.

The euro zone currency stabilized as markets digested Syriza’s pledge to renegotiate the terms of Greece's €240 billion international bailout and reverse many of the austerity measures imposed by the European Union and International Monetary Fund.

Market sentiment remained backed after the European Central Bank unveiled a €1.2 trillion asset purchase program last week, aimed at combatting slowing growth and inflation in the euro area.

Earlier, data showed that German business confidence improved to the highest level in six months in January, easing concerns over the health of the euro zone's largest economy.

Ifo, the German research institute, said its Business Climate Index rose to 106.7 this month, above forecasts for 106.3 and up from a reading of 105.5 in December.

Earlier Monday, official figures showed that Japanese exports rose 12.9% in December from a year earlier, the largest gain in a year, fuelling optimism over the economic recovery.

Moreover, the minutes of the Bank of Japan’s December meeting signaled policymakers are not in a hurry to step up stimulus measures, despite the threat to the inflation outlook from the recent sharp drop in oil prices.

Markets will be anticipating the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.