Euro falls as IMF walks out of Greek bailout talks

The China Post - - MARKETS -

The euro fell on Fri­day as hopes for a Greek bailout deal took a hit af­ter the In­ter­na­tional Mon­e­tary Fund pulled out of crunch talks be­tween Athens and its cred­i­tors.

In Tokyo, the sin­gle cur­rency was at US$1.1229 and 138.63 yen, against US$ 1.1260 and 139.00 yen in New York.

The U.S. dollar bought 123.47 yen against 123.45 yen.

The IMF piled pres­sure on Athens Thurs­day when it walked away from the talks say­ing the “ball is very much in Greece’s court right now,” adding key dis­agree­ments were on pen­sions, taxes and fi­nanc­ing.

Greece must reach a com­pro­mise with its cred­i­tors — the IMF, Euro­pean Com­mis­sion and Euro­pean Cen­tral Bank — be­fore the end of the month to un­lock much-needed cash to ser­vice its debts. Fail­ure to do so will lead it to de­fault and pos­si­bly exit the eu­ro­zone.

“The fact the IMF walked out of talks overnight and flew straight back to the States doesn’t help sen­ti­ment or give you con­fi­dence a deal will be done ... This will get messy,” Evan Lu­cas, an IG mar­kets strate­gist in Mel­bourne, wrote in a client note.

The dollar was slightly higher af­ter data showed U.S. re­tail sales in May rose 1.2 per­cent, bet­ter than the 1.1 per­cent gain fore­cast by an­a­lysts.

The fig­ures are the lat­est to in­di­cate the world’s num­ber one econ­omy is back on the road to re­cov­ery af­ter a wob­bly few months at the start of the year. They also in­creased the like­li­hood the Fed­eral Re­serve will hike in­ter­est rates this year.

How­ever, Ya­suhiro Kaizaki, vice pres­i­dent for global mar­kets at Su­mit­omo Mit­sui Trust Bank, told Bloomberg News: “It seems like there’s a deep-rooted con­cern about a strong dollar.

“We’re in a sit­u­a­tion now where fur­ther up­side in the dollar is go­ing to con­tinue to be hard to come by.”

The dollar was mostly higher against other Asia-Pa­cific cur­ren­cies, firm­ing to SG$1.3464 from SG$1.3438 on Thurs­day, to 1,114.29 South Korean won from 1,107.75 won, and to 33.71 Thai baht from 33.64 baht.

The green­back also gained to 64.03 In­dian ru­pees from 63.78 ru­pees, to 13,323 In­done­sian ru­piah from 13,290 ru­piah, to 45.30 Philip­pine pe­sos from 44.98 pe­sos.

The Aus­tralian dollar weak­ened to 77.28 U.S. cents from 77.67 cents while the Chi­nese yuan bought 19.86 yen against 19.82 yen.

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