Euro firm after Greek deal, yen edges up

SYDNEY Tue Nov 27, 2012 4:58am IST

A man holds Japanese 10,000 Yen ($121) bank notes in front of a bank in Tokyo November 22, 2012. A 4 percent slide in the yen against the dollar in the last week and a half, driven by expectations that the Bank of Japan would take aggressive monetary policy under a likely new government, has increased the allure of long-suffering exporter shares and pushed Japanese stocks higher. REUTERS/Kim Kyung-Hoon

A man holds Japanese 10,000 Yen ($121) bank notes in front of a bank in Tokyo November 22, 2012. A 4 percent slide in the yen against the dollar in the last week and a half, driven by expectations that the Bank of Japan would take aggressive monetary policy under a likely new government, has increased the allure of long-suffering exporter shares and pushed Japanese stocks higher.

Credit: Reuters/Kim Kyung-Hoon

Related Topics

SYDNEY (Reuters) - The euro was caught in choppy trade on Tuesday after euro zone and International Monetary Fund officials clinched agreement on a new debt target for Greece in a significant step towards releasing a much-needed aid package for Athens.

The euro briefly gained a quarter of a cent to $1.3007, its highest in a month, before easing to $1.2985, still up 0.1 percent on the day.

Against the yen, it initially rose around 20 pips to 106.62, not far from a seven-month high around 106.98 on Friday, before edging lower to 106.48.

"It was not a huge reaction because (the deal) was already priced in," said Joseph Capurso, a strategist at Commonwealth Bank of Australia.

He said the euro should start losing momentum and ease around a cent by the end of the week.

"Economic data in Europe is getting worse and you also have the unresolved U.S. fiscal cliff in the background," he added.

The agreement, which came after three weeks of discussion, involves a reduction of Greece's public debt to 124 percent of GDP in 2020. Talks are still continuing on the methods to be used to lower the debt burden.

The deal opens the way for a major aid installment needed to recapitalize Greece's teetering banks and enable the government to pay wages, pensions and suppliers in December.

Greece is facing debt payments mid-December.

The dollar nursed its recent losses against the yen and last fetched 82.05 yen, having slipped 0.4 percent on Monday. Traders said some investors unwound long positions in the U.S. dollar built up in recent weeks.

The Japanese currency has been under pressure in recent weeks on mounting speculation that a new government after next month's general elections will force the Bank of Japan to ease monetary policy aggressively.

It has fallen to seven-month lows against the U.S., Aussie and New Zealand dollars.

There was no major data expected in Asia and investors were awaiting European reports, including German import and export prices, French consumer sentiment and the second release of UK Q3 GDP figures.

(Reporting by Cecile Lefort; Editing by Richard Pullin)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Kerry in India

REUTERS SHOWCASE

Deadly Landslide

Deadly Landslide

Landslide near Pune kills 10, scores feared trapped.  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

Smuggling Gold

Smuggling Gold

Air India staff found smuggling gold  Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound .  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Expanding Reach

Expanding Reach

Tata to invest $35 bln over 3 years, focus on new businesses   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage