Euro rises on hopes of assistance for Greece
October 26, 2012, 12:03 am TWN
TOKYO--The euro rose in Asia on Thursday, boosted by speculation Greece will be given more time to put in place reforms to help rein in its huge public debt, while the U.S. dollar also rose past 80 yen.
The single currency bought US$1.2977 and 103.77 yen in Tokyo afternoon trade, up from US$1.2972 and 103.49 yen in New York late Wednesday.
On Thursday, the dollar rose to 80.03 yen from 79.79 yen in New York to hit the highest level since early July.
There are growing expectations that the Bank of Japan will take further easing steps at a policy meeting next week, which has put pressure on the yen.
More investors raised their bets that the bank would announce aggressive easing measures, said Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.
“Aggressive steps would include open-ended forms of monetary easing,” he told Dow Jones Newswires, adding that the yen should also weaken in the long term due to Japan's increasing trade deficits.
In the United States Wednesday worsening business sentiment in Europe accelerated euro selling but hopes Greece will get an extra two years to get itself back on track provided the single currency some support.
On Wednesday, Greece's finance minister said he had agreed on a new austerity package with Athens' international creditors and won more time to fix the debt-crippled nation's finances.
However the European Union and International Monetary Fund said only that there had been progress but no firm deal, as Greece also looks to unlock its latest batch of rescue cash.
“There is an absence of hard news on the fate of Greece's next bailout tranche” despite its progress with creditors, National Australia Bank said in a note.
The U.S. Federal Reserve's two-day policy meeting that ended Wednesday offered no new policy measures, although the central bank reaffirmed its commitment to keep its easy policy stance in place until the economy was much stronger.
The U.S. dollar was mixed against other Asia-Pacific currencies.
It slipped to 41.34 Philippine pesos from 41.38 pesos on Wednesday, to 30.69 Thai baht from 30.76 baht, to 1,101.40 South Korean won from 1,102.90 won, and to SG$1.2214 from SG$1.2231.
The U.S. dollar inched up to 53.79 Indian rupees from 53.73 rupees, while staying almost unchanged at 9,621 Indonesian rupiah.