Euro drops be­low US$1.1 as risks of Greek euro exit grow

The China Post - - BUSINESS INDEX & -

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.

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