Members login
Greece's debt problems prodded short-term investors to sell the euro in Asia Friday.
Written by article default Friday, 23 April 2010 08:38
Market OverviewConcerns that the Group of 20 industrialized and developed nations may not come up with an effective plan to address Greece's debt problems prodded short-term investors to sell the euro in Asia Friday, sending the currency to its lowest level against the dollar in nearly a year.
Against the yen, the European single unit traded hands at JPY123.64, compared with JPY124.52. The euro's weakness sent the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, up to 81.897 from 81.572.
Meanwhile, the dollar was down against the yen at JPY93.40 at 0450 GMT from JPY93.56 late Thursday in New York. In Tokyo morning trade, the U.S. unit briefly climbed to a one-week high at JPY93.64, in part on the coattails of its rise against the euro. But the gains prompted Japanese exporters, and short-term investors looking to lock in profits, to sell the unit, dealers said.
The euro was trading at USD1.3228 at 0630 GMT after touching a fresh 11-month low of USD1.3201, down from USD1.3295 late Thursday in New York.
The Pound weakened against the dollar as Britain’s public finances suffered their worst year since World War 2. The Office for National Statistics reported the government’s preferred measure of public sector net borrowing hit 163.4 billion pounds (USD252.5 billion) in the fiscal year that ended in March.
The Australian dollar fell in Asia on Friday after the governor of the central bank said in a speech interest rates are close to average levels, which dealers interpreted as a sign the bank may cool its cycle of tightening policy.
Market expectation
The dollar is rallying against the euro, Swiss franc and sterling as markets continue to fret over Greece's debt morass.
Still, despite the increasingly gloomy outlook for the euro, dealers warned against completely ruling out the possibility that the currency could get a brief bump later in the day if any positive-sounding headlines emerge from the G20.
In morning trade in Japan, the euro dropped to USD1.3201, its lowest level since April 30, 2009. Dealers said mounting anxiety that Greece could default on its debt may drag the common currency below USD1.3000 next week.
Sterling is likely to stay lower ahead of Friday's U.K. first quarter GDP data, after public sector debt and retail figures undermined the currency in prior trading.
Investors should stay short the Australian dollar as the unit is vulnerable to any downside surprises, analysts said.
European stocks are expected to start higher Friday, despite concerns about Greece's debts, after Wall Street closed modestly higher.