Euro Struggles in Asia on Greek Eurozone Exit Fears
The euro edged up from a nine-year low against the dollar on Wednesday in Asia, but it remained under pressure owing to fears of a possible Greek exit from the eurozone.
The single currency fell to $1.1839 in early Tokyo trade -- its lowest level since February 2006 -- before recovering to $1.1875. It ended at $1.1892 in New York on Tuesday.
The euro jumped to 141.38 yen from 140.93 yen, while the dollar rose to 119.04 yen, from 118.50 yen in New York.
Investors have been skittish as oil prices plunge and fears increase that Greece could exit the eurozone if the anti-austerity opposition party wins a general election later in the month.
Analysts have warned that a victory for the far-left Syriza party could see them abandon stringent measures required under an IMF-EU bailout of the country, which could in turn lead it out of the currency bloc.
A weekend report in Germany's Der Spiegel quoted Berlin sources as saying they consider Greece's exit "almost inevitable" if Syriza wins.
The euro has also been hit by speculation that the threat of deflation in the eurozone could force the European Central Bank to unleash further easing measures.
"The only real brake on the euro downtrend this quarter should be its popularity, with investors already heavily on board," Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney, told Bloomberg News.
"With (ECB chief Mario) Draghi looking increasingly likely to override German objections to QE (quantitative easing) at the January 22 ECB meeting and the U.S. economy firmly on track for higher interest rates this year, any euro bounces should be modest in scale and brief in duration."
The Malaysian ringgit fell to a five-year low 3.5862 against the dollar as falling crude prices hurt the oil-exporting country. But the unit recovered slightly in afternoon trade on news that Malaysia’s trade surplus jumped to a three-year high.
Markets were also looking ahead to the release later in the day of minutes from the U.S. Federal Reserve's most recent meeting as well as jobs data on Friday.
The dollar was mostly stronger against other Asia-Pacific currencies.
It rose to Sg$1.3344 from Sg$1.3331 on Tuesday, to 12,699.50 Indonesian rupiah from 12,620.00 rupiah, to 45.03 Philippine pesos from 45.01 pesos, to 63.42 Indian rupees from 63.37 rupees, and to Tw$31.97 from Tw$31.96.
The dollar weakened at 32.87 Thai baht from 32.90 baht.
The Australian dollar fell to 80.75 U.S. cents from 81.41 cents, while the Chinese yuan bought 19.14 yen against 19.15 yen.
Source: Agence France Presse
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