Euro drops below US$1.1 as risks of Greek euro exit grow
The European single currency briefly dropped below US$1.1 on Monday as investors grow concerned Greece is headed for a debt default and a possible eurozone exit. The euro fell to US$1.0952 in Asia early Monday from US$1.1160 in New York on Friday, dropping through the US$1.1 mark for the first time since early June.
The single currency subsequently edged up, changing hands at US$1.1009 in the afternoon. The yen soared as investors sought safer investments for their cash. The euro bought 135.41 yen and the dollar was at 122.88 yen, compared with 138.26 yen and 123.89 yen in U.S. trade.
“Risk aversion. This is not like before,” she said in a note. “We’ve been using the term ‘crisis’ loosely for some time now but really, it wasn’t. Now is crunch time,” said Emma Lawson, senior currency strategist at National Australia Bank. Shinya Harui, Nomura Securities currency analyst, said “funds are flowing to safer assets” such as the yen. But Harui noted: “It is unlikely that the crisis will spill over to sovereign bonds of Italy, Spain and other neighboring countries as the ECB has prepared a safety net,” he told AFP.
The U.S. dollar was higher against other Asia-Pacific currencies. The greenback firmed to 13,349 Indonesian rupiah from 13,315 rupiah, and to 33.86 Thai baht from 33.77 baht.
It also climbed to 63.85 Indian rupees from 63.62 rupees, to SGg$1.3525 from SG$1.3443, to 1,122.44 South Korean won from 1,114.99 won, and to 45.18 Philippine pesos from 45.12 pesos.
The Australian dollar slipped to 76.50 U.S. cents from 77.23 cents, while the Chinese yuan eased to 19.72 yen from 19.89 yen.