Euro slips in Asia on Portugal bank bailout
August 5, 2014, 12:00 am TWN
TOKYO--The euro slipped against the dollar in Asia on Monday following news of a bailout for a crisis-hit Portuguese bank, while the dollar held steady after falling on U.S. jobs data.
Portugal's central bank announced late Sunday that the nation will inject 4.4 billion euros (US$5.9 billion) into the Banco Espirito Santo (BES) amid fears of a catastrophic bank run.
The euro bought US$1.3421 in Asia on Monday, down from US$1.3430 in U.S. trade late Friday, while fetching 137.80 yen against 137.75 yen.
The dollar was at 102.66 yen compared with 102.60 yen in New York on Friday.
The dollar slipped on Friday after U.S. jobs data for July turned out to be solid but not strong enough to boost inflation expectations.
BES, Portugal's third-largest banking group, will be split into two entities, with its toxic assets isolated and its healthier assets regrouped in a new Novo Banco, national bank governor Carlos Costa said late Sunday.
The market focus is now shifting to Thursday's monthly meeting of the European Central Bank (ECB), although it is widely expected to hold fire on new policy action despite a lingering threat of eurozone deflation and geopolitical risks.
“The ECB might be enjoying a summer lull, eventually, with no hints of new action expected” at the upcoming meeting, Credit Agricole said in a note.
The dollar was mixed against other Asia-Pacific currencies.
It fell to 32.15 Thai baht from 32.28 baht on Friday, to SG$1.2464 from SG$1.2489, to 1,033.01 South Korean won from 1,035.23 won, and to 11,740.00 Indonesian rupiah from 11,791.30 rupiah.
The dollar rose to 60.99 Indian rupees from 60.82 rupees, and to 43.69 Philippine pesos from 43.68 pesos.
The Australian dollar climbed to 93.19 U.S. cents from 92.90 cents, while the Chinese yuan bought 16.58 yen against 16.64 yen.