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:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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