Euro ticks up despite Greek debt worries

GMT 13:39 2015 Wednesday ,13 May

Arab Today, arab today Euro ticks up despite Greek debt worries

An improving eurozone inflation
Tokyo - AFP

The euro rose Wednesday on cautious hopes for the eurozone economy, even as Greece admitted that it raided an emergency account to pay off an IMF loan, aggravating concerns about Athens' finances.

In Tokyo, the European single currency strengthened to $1.1247 and 134.81 yen from $1.1213 and 134.44 yen in New York.

The dollar fetched 119.83 yen, down from 119.90 yen in New York late Tuesday and 120.25 yen in Tokyo earlier Tuesday.

An improving eurozone inflation picture suggested the European Central Bank may wrap up a quantitative easing scheme sooner than expected, lending support to the currency, said Yuji Saito, executive director of foreign exchange at Crédit Agricole in Tokyo.

A European Union forecast last week said the bloc was likely to escape deflation this year.

"The euro got a boost after German bond yields rose," Saito said, adding that the relatively upbeat inflation picture could mean an earlier-than-expected exit from the ECB's monetary easing scheme.

The single currency also benefited from investment funds settling accounts, he said.

"Whether this will become a firm trend, we will have to wait and see", Saito added.

Traders are tracking talks between Greece and its international creditors aimed at sealing a bailout deal that would avoid a default and exit from the eurozone.

There was relief at the start of the week when it emerged Athens had managed to pay 750 million euros due to the IMF.

But on Tuesday, Greece admitted it tapped into an emergency account to pay the debt.

Billions more in loan repayments are due over the next three months, and Greece's Finance Minister Yanis Varoufakis warned that his country risked running out of cash within two weeks if no deal was reached with its creditors to unlock the last tranche of aid funds

"The news that Greece has borrowed from its IMF account, to pay its IMF obligations, has increased the concerns over the smoke and mirrors being used and raises worries about their ability to pay," Capital Economics said in a commentary.

"The account they used must be repaid within the month."

The dollar was mixed against other Asia-Pacific currencies.

It dropped to Sg$1.3349 from Sg$1.3388 on Tuesday, to 33.69 Thai baht from 33.78 baht, and to 44.73 Philippine pesos from 44.86 pesos.

It also fell to 13,164.00 Indonesian rupiah from 13,203.00 rupiah and to Tw$30.69 from Tw$30.74.

The dollar rose to 1,099.71 South Korean won from 1,095.98 won while staying unchanged at 64.15 Indian rupees.

The Australian dollar firmed to 79.82 US cents from 79.36 cents while the Chinese yuan edged down to 19.32 yen from 19.36 yen.


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