Euro eases amid uncertainty over Greek bailout

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TOKYO: The euro eased against the dollar in Asia on Monday amid uncertainty surrounding talks towards securing a eurozone bailout for bankruptcy-threatened Greece, dealers said.

The euro fell to $1.4276 in Tokyo morning trading from $1.4301 in New York late Friday. The European single currency also sagged to 114.32 yen from 114.46 yen.

After seven hours of crunch talks, eurozone finance ministers said they and the IMF would release 12 billion euros of loans in "mid-July" on condition Greece adopted tough budget cuts and asset sales.

But dealers said that trading would continue to be choppy without a final agreement.

"The euro softened Monday as details about the bailout plan failed to dispel uncertainty over whether Greece would gain sufficient funds that it needs for the time being," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.

Markets worry a default on Greek debt could trigger a cascade of problems in Europe's bigger economies, including Spain. Such a domino effect could again hobble the global financial system, much like the massive crisis of 2008.

Showing the extent of international fears over renewed financial contagion, G7 finance ministers from Britain, Canada, France, Germany, Italy, Japan and the United States held a late-night telephone conference to discuss the Greek debt crisis.

Athens will now receive a 12-billion-euro fifth loan tranche once the Greek parliament passes a new austerity package.

Ministers also agreed that the critical second bailout for Greece, expected to top 100 billion euros, will see banks, pension funds and insurers invited to agree to "informal and voluntary rollovers" of existing debts years after their original redemption dates.

A reshuffled Greek government has vowed to deliver on new promises of austerity ahead of a parliamentary confidence vote set for Tuesday.

"The confidence vote will be a key for further eurozone talks over the bailout," Kamei said.

The single currency had climbed against the dollar on Friday as investors welcomed Germany's signal of willingness to rescue Greece after a summit with France, amid worries it is edging towards defaulting on its debt.

On Monday the dollar firmed to 80.13 yen from 80.03 yen.

On the US side, a Federal Open Market Committee meeting as well as Federal Reserve Chairman Ben Bernanke's comments on Wednesday will be in focus, dealers said, amid recent signs of weakness in the world's biggest economy. (AFP)