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Wednesday, July 17, 2024

Euro holds steady after Greece defaults

TOKYO, Japan – The euro held steady in Asia on Wednesday as traders shrugged off the widely expected default by Greece, with focus now turning to the weekend’s referendum, which could determine the country’s eurozone future.

The single currency bought $1.1136 and 136.44 yen in Tokyo trade compared with $1.1139 and 136.38 yen in New York late Tuesday.

The dollar was at 122.48 yen against 122.44 yen.

Athens missed Tuesday’s deadline to repay the International Monetary Fund, making it the first developed country to default with the Fund.

However, the lender has still not ruled out a request by Greece to give it more time, giving the government financial room to continue negotiations bailout reform talks with creditors.

“Greece has officially missed its payment to the IMF, but markets are seemingly unconcerned,” said Emma Lawson, senior currency strategist at National Australia Bank.

“We have passed that mattering for now. There is so much uncertainty, speculation, truth and partial truth that many markets are in stasis; waiting to see which way this goes,” she said in a note.

Greek Prime Minister Alexis Tsipras plunged bailout talks with creditors into chaos as he announced a referendum for Sunday on whether to accept reform plans he said would humiliate the country.

The European Central Bank’s governing council is to meet again later Wednesday, with all eyes on whether it will continue to provide liquidity to Greek banks after the bailout program officially expired on Tuesday.

The ECB at the weekend decided to maintain the level of its emergency cash support.

“Most analysis suggests they will not do anything to worsen the situation, but it is likely to remain frozen,” Lawson of National Australia Bank said.

The dollar was mostly lower against other Asia-Pacific currencies.

It eased to 13,309  Indonesian  rupiah from 13,320 rupiah on Tuesday, and to 33.76 Thai baht from 33.77 baht.

It also declined to 63.66 Indian rupees from 63.77 rupees, to Sg$1.3457 from Sg$1.3475, and to 45.07 Philippine pesos from 45.13 pesos.

The greenback edged up to 1,118.73 won from 1,118.68 won, while it remained unchanged at Tw$30.87.

The Australian dollar gained to 77.25 US cents from 76.70 cents, while the Chinese yuan was at 19.73 yen against 19.71 yen.

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