Euro pressured as focus returns to US rates
The euro was under pressure on Wednesday as investors’ confidence on a Greek debt deal allowed focus to shift to the prospects of higher U.S. interest rates ahead.
The single European currency bought US$1.1184 and 138.73 yen in Tokyo, slightly up from US$1.1168 and 138.36 yen in New York, but still lower than US$1.1393 and 139.95 yen in Asian trade on Tuesday.
The dollar rose to 124.03 yen from 123.89 yen in U.S. trade.
“Markets are pretty content with the idea that Greece and its creditors will do a deal before the June 30 deadline” on repaying massive debts, said Emma Lawson, senior currency strategist at National Australia Bank.
“And the Fed will hike in September, and China can avoid an equity market accident. Excellent,” she said in a note, adding that helped push up prices of riskier assets.
Greece’s Prime Minister Alexis Tsipras will meet the leaders of the country’s international creditors on Wednesday in Brussels.
The meeting will be held on the sidelines of a eurozone finance ministers meeting there.
Athens presented new reform proposals to its creditors on Monday in a bid to unlock the last tranche of bailout funds and avoid defaulting on its massive debts at the end of June.
The euro stayed weighed down by the European monetary easing even though optimism was growing that Greece will avert default.
“We suspect that positioning has been cleared out to the point where market par- ticipants are once again more comfortable returning to the consensus long-USD trade,” BNP Paribas SA strategists led by Steven Saywell, the global head of foreign exchange strategy in London, wrote in a June 24 report.
The dollar was mostly higher other Asia-Pacific currencies.
It rose to 1,109.77 South Korean won from 1,105.13 won on Tuesday, to 63.68 Indian rupees from 63.63 Indian rupees, and to 33.78 Thai baht from 33.75 baht.
The greenback went up to SG$1.3422 from SG$1.3393, and to 13,293 Indonesian rupiah from 13,256 rupiah, while inching down to 45.12 Philippine pesos from 45.14 pesos.
The Australian rose to 77.35 U.S. cents from 77.06 cents, while the Chinese yuan firmed to 19.96 yen from 19.90 yen.