Euro drifts lower over Greek debt default worries
The euro drifted lower Wednesday on fears about a Greek debt default as mayors across the country lashed out at a government decree ordering them to hand over their cash reserves to help Athens pay its bills.
In Tokyo, the single currency edged down US$1.0734 and 128.35 yen from US$1.0735 and 128.42 yen in New York late Tuesday.
Greek Prime Minister Alexis Tsipras will meet German Chancellor Angela Merkel this week on the sidelines of a European Union summit, as Athens wrangles with creditors over a new rescue package.
After the euro appeared last month to be on its way to hitting parity with the dollar for the first time since 2002, the embattled unit staged a rally, partly due to hopes for a Greek deal.
Adding to downward pressure on the euro, a leading survey showed German investor sentiment unexpectedly fell for the first time in six months in April as weak global growth hit confidence in Europe’s largest economy.
The widely watched investor confidence index calculated by the ZEW economic institute slipped by 1.5 points to 53.3 points in April, disappointing analysts’ expectations for a further increase this month.
The U.S. dollar, which rose in morning Asian trade, slipped back to 119.54 yen from 119.63 yen in New York, after Japan posted its first monthly trade surplus in nearly three years in March.
But “the overall trend is certainly gravitating towards wanting to own U.S. assets,” Dean Popplewell, vice president of currency analysis and research at Oanda Corp, told Bloomberg News.
The dollar weakened against other Asia-Pacific currencies.
It slipped to SG$1.3475 from SG$1.3505 on Tuesday, to 1,080.20 South Korean won from 1,082.10 won, and to 32.36 Thai baht from 32.41 baht. The greenback also weakened to 44.21 Philippine pesos from 44.28 pesos, to 62.77 Indian rupees from 63.03 rupees, and to 12,896.20 Indonesian rupiah from 12,954.50 rupiah.
The Australian dollar rose to 77.69 U.S. cents from 76.97 cents, while the Chinese yuan edged up to 19.27 yen from 19.25 yen.