AFP: Euro slides in Asia despite EU Greece pledge
Agence France-Presse
First Posted 12:29:00 02/12/2010
Filed Under: business, Debt Markets, Markets & Exchanges
TOKYO – The euro skidded lower in Asian trade Friday after a European Union pledge to support debt-stricken Greece failed to calm market fears about the region's fiscal troubles.
The euro dropped to $1.3663 in Tokyo morning trade from 1.3695 in New York late Thursday, and to 122.53 yen from 122.86. The dollar eased to 89.64 yen from 89.70.
In recent weeks, the euro has been rocked by concerns that other European countries such as Portugal, Ireland, Italy, Greece and Spain could suffer similar fiscal problems as Greece.
"It is evident that fiscal and debt problems in Greece and elsewhere in Europe have tarnished the image of the euro," said Credit Agricole analyst Mitul Kotecha.
European Union leaders at a summit in Brussels promised solidarity to debt-stricken Greece but held back from offering an immediate cash bailout.
The "lack of detail came as a disappointment. Markets had nothing concrete to digest aside from a general agreement to provide assistance if needed," said Kotecha.
Under a European Commission budget target agreement, Greece must reduce its public deficit this year by four percentage points from the current 12.7 percent, which is more than four times above the EU limit.
"European leaders look to be back-stopping the Greek government in the short term without committing to long-term financial assistance in order to give it time to push through fiscal austerity measures without a real crisis of investor confidence unfolding," said Rabobank economist Adrian Foster.
Investors were waiting for a snapshot of eurozone economic growth in the fourth quarter of 2009, expecting modest growth.
Market players were also eyeing US indicators including January retail sales and a consumer confidence report by the University of Michigan, looking for fresh signs that a recovery in the world's largest economy remains on track.
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