Euro edges higher in cautious trade

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GMT - 3 Hours Euro edges higher in cautious trade

Post by εﺓз• » ιη∂αġι яσ¢χ « • on Thu Sep 29, 2011 8:41 am

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TOKYO: The euro edged higher in Asian trade Wednesday on cautious optimism that eurozone leaders can agree on a plan to contain its debt crisis and help avert a global recession.

However, sentiment was tempered by a report that a split had developed in the bloc over terms of a second bailout package for Greece, said dealers.

The euro fetched $1.3574 in Tokyo trade Wednesday, from $1.3535 in New York late Tuesday.

The single currency was at 103.90 yen from 103.35, continuing to rise after slipping to a 10-year low below 102 yen on Monday.

The yen was at 76.54 to the dollar from 76.84.

"The rally in risk assets over the last couple of days has helped drag the euro higher, but much of the reappraisal has been built on hopes that policymakers will deliver some grand solution soon," said Credit Agricole in a note.

"Optimism on some grand solution is likely to fade especially as most of the rhetoric does not support the euphoria," it added.

Rising confidence that European officials are considering plans to increase the size of its bailout fund and to recapitalise banks "has served to generate some optimism that a global recession may be avoided," noted National Australia Bank.

But the Financial Times on Tuesday reported that Greece's second 109 billion euro bailout had run into trouble with some eurozone members pushing for private creditors to take a bigger writedown on their Greek bond holdings.

US equities pared earlier gains following the report, which Credit Agricole said showed "markets remain nervous about the eurozone crisis".

World markets have been volatile in recent weeks on fears the European debt crisis will spiral out of control and help push the global economy into recession, as European leaders dither on how to best tackle the situation.

The European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) are due in Athens this week to review Greece's progress in cutting its debt levels.

They will decide on whether to release the latest tranche of bailout funds the Greek government needs to pay its bills.

In Athens, Greek deputies approved a controversial property tax Tuesday in a bid to plug a budget hole and help unlock the latest tranche of bailout funds needed to prevent a default that could come as early as next month.

German Chancellor Angela Merkel met Greek Prime Minister George Papandreou pledging every assistance as Athens implements tough austerity reforms.

A sense of disarray in Europe was this week illustrated after Germany shot down moves to boost the 440-billion-euro ($590 billion) European Financial Stability Facility (EFSF) after EU economic affairs commissioner Olli Rehn said it should be given "greater strength."

Germany will on Thursday vote on whether to approve proposals set out in July to extend the powers of the EFSF that would allow it to buy the bonds of highly-indebted countries. (AFP)
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GMT - 3 Hours Re: Euro edges higher in cautious trade

Post by ~lonely princess~ on Tue Oct 04, 2011 6:02 am

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