Euro down in Asian trade ahead of Greece meeting
TOKYO – The euro lost ground in Asian trade Monday after hitting a seven-month high on the yen as jittery markets look to a meeting later in the day aimed at finalising a bailout deal for debt-hit Greece.
The single currency bought $1.2953 and 106.67 yen in Tokyo morning trade, from $1.2973 and 106.90 yen in New York on Friday.
The euro had climbed to a seven-month high above 107 yen in earlier Asian trade Monday but the unit quickly fell off its perch.
The dollar was also weaker at 82.32 yen against 82.40 yen in US trade.
The euro’s initial gains were likely stoked by comments from French Finance Minister Pierre Moscovici, who on Sunday offered some hope in the long-running saga to reach a deal for Athens.
“I think that in effect we are very close to a solution,” Moscovici said Sunday referring to eurozone finance ministers who are meeting later Monday.
“I don’t know if there will be an agreement tomorrow, I know it is possible and I want one.”
The ministers were to meet for their third effort to agree on unlocking a 31.2-billion-euro ($40.5-billion) slice of aid for Greece as it teeters on the verge of bankruptcy.
Despite the yen’s gains in Monday trade, the currency has been under pressure recently on expectations that the Bank of Japan will unveil a new round of monetary easing next month as recent data point to a worrying slowdown in the world’s third-biggest economy.
Also stoking easing speculation were recent comments from the country’s main opposition leader Shinzo Abe, who has vowed to pressure the central bank for aggressive policy measures if he is elected as Japan’s next premier.
Abe and his Liberal Democratic Party are widely expected to defeat Prime Minister Yoshihiko Noda and his Democratic Party of Japan at a December 16 general election.
The greenback, meanwhile, was mixed as markets look for news of compromise in Washington that will avert the so-called fiscal cliff of spending cuts and tax hikes, seen as likely to send the economy into recession if it comes into effect.
Finding a new spending deal to replace the package, scheduled to come into effect on January 1, has been elusive in the bitterly-divided US Congress.