Euro drops on bad news com­ing out of Greek ne­go­ti­a­tions

The China Post - - BUSINESS INDEX & -

The euro fell Mon­day af­ter talks be­tween Greece and its in­ter­na­tional cred­i­tors col­lapsed, bring­ing the threat of a Greek exit from the eu­ro­zone closer than ever.

The euro dropped to US$1.1220 and 138.50 yen in Tokyo af­ter­noon trade from US$1.1260 and 138.92 yen in New York late Fri­day.

The U.S. dollar firmed to 123.43 yen from 123.37 in U.S. trade ahead of an ea­gerly awaited press con­fer­ence Wed­nes­day by Fed­eral Re­serve chief Janet Yellen af­ter a two-day pol­icy meet­ing.

An­a­lysts said the euro’s fall was limited as in­vestors were still tak­ing a wait-and-see ap­proach to the un­fold­ing debt drama.

Ne­go­ti­a­tions be­tween Greece and its cred­i­tors broke down in less than an hour on Sun­day, with both sides blam­ing the other’s re­fusal to back down on cer­tain is­sues.

It fanned fears that the cash­starved Greek gov­ern­ment was head­ing ir­re­versibly into the fi­nan­cial abyss with a huge IMF debt pay­ment due at the end of the month.

The feel­ing is now stronger than ever that Greece could be head­ing for an exit from the euro af­ter years of cri­sis.

All sides had agreed that the talks were the last chance for Athens to un­lock vi­tal bailout cash in re­turn for tough re­forms that Greece’s Prime Min­is­ter Alexis Tsipras still doggedly re­fuses.

No­mura an­a­lyst Harui said in­vestors were now wait­ing for a Thurs­day meet­ing of the eu­ro­zone’s 19 fi­nance min­is­ters, who con­trol the bailout purse strings.

Evan Lu­cas, a mar­kets strate­gist at IG Ltd. in Mel­bourne, said the fact that the Sun­day meet­ing lasted only 45 min­utes “doesn’t give you con­fi­dence a deal will be done” in time.

The dollar was mostly stronger against other Asia-Pa­cific cur­ren­cies, firm­ing to SG$1.3480 from SG$1.3464 on Fri­day, to 1,115.81 South Korean won from 1,114.29 won, and to 33.75 Thai baht from 33.71 baht.

The green­back also rose to 64.12 In­dian ru­pees from 64.03 ru­pees, to 13,334 In­done­sian ru­piah from 13,323 ru­piah.

It edged down to 45.28 from 45.30 Philip­pine pe­sos.

The Aus­tralian dollar weak­ened to 77.17 U.S. cents from 77.28 cents while the Chi­nese yuan bought 19.85 yen against 19.86 yen.

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