Euro weaker against dollar

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TOKYO: The euro came under renewed pressure against the dollar in Asia on Tuesday, resuming its fall on concerns over the European debt crisis, after a brief respite overnight.

The euro was at $1.3517 in Tokyo morning trade against $1.3538 in New York late Monday. The European common currency edged down to 103.16 yen from 103.33 yen, but was up from the fresh 10-year low below 102 yen it hit on Monday.

The dollar was rangebound at 76.31 yen compared to 76.42 yen.

The euro showed some resilience overnight after several days of rising alarm over the region's debt problem, helped by an expectation that European policymakers would take concrete action to tackle the crisis.

In the latest of various unconfirmed reports, CNBC said the European Investment Bank could be used to form a special unit to issue bonds and buy distressed debt from European governments.

Under the reported arrangement, Europe's troubled banks could swap mainly their Greek debt for EIB paper, which could then be used at the European Central Bank's liquidity window.

"We've experienced this type of temporary rebound many times before, with markets coming up for air after days of brutal selling," said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.

"This will likely again be a short break before we see more evidence of progress in the Greek debt crisis," Takahashi told Dow Jones Newswires.

In Tokyo trading, the dollar and the euro were pressured by some selling from Japanese exporters as the end of the April-September fiscal first half approaches, dealers said.

"While we may see some positive headlines from Europe in the week ahead, the general sense of impending doom will likely remain the primary theme as European leaders struggle to build a consensus on the right course of action to avoid a full scale crisis," said Chris Gore, currency analyst at GOMarkets in Melbourne.

The consolidation around low levels "shows that the European debt crisis is a real problem and we don't have a real credible solution to how they are going to handle Greece and prevent contagion into the broader European financial system," BNZ FX strategist Mike Burrowes said. (AFP)