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Euro rebounds but sentiment remains weak in Asia

currencies

Euro rebounds but sentiment remains weak in Asia

Pressure on the euro eased yesterday as it saw moderate gains against the dollar and yen in Asian trade, but risk appetite was constrained by persistent eurozone fears.
The single unit advanced to US$1.2263 in Tokyo afternoon trade after falling sharply to US$1.2175 in New York late Wednesday on fears of contagion from the debt crisis that has rocked the eurozone.
The single currency fetched 110.58 yen from 109.46. The U.S. dollar rose to 90.17 from 89.98 yen. However, the euro's gains Thursday would be short lived, analysts warned.
"As the eurozone issue is shifting from Greece to the Spanish financial sector and fiscal problems, the euro is likely to keep declining against the dollar," Barclays Capital said in a note to clients. "The European monetary authorities are seen to give a quiet nod to the current level of the euro, while the Japanese authorities are not poised to make preventive measures against the stronger yen," it said.
Some analysts have said a weak euro would assist a European recovery by making its exports cheaper versus those from countries with stronger currencies, helping to boost demand and drive growth.
However, the International Monetary Fund has warned Spain that its recovery would be "weak and fragile" with urgent labour and bank reforms needed.
IMF chief Dominique Strauss-Kahn on Wednesday urged EU countries to coordinate their national crisis recovery plans, notably by using part of a US$1 trillion-EU-IMF stabilisation fund to boost growth.
The greenback fell to 1,224 won from 1,253 late Thursday, amid speculation the Bank of Korea may have again moved in after a suspected US$2 billion intervention Tuesday.
The U.S .dollar was weaker against other Asian currencies, falling to 9,258 Indonesian rupiah from 9,365 on Wednesday, to NT$32.16 from NT$32.25 and to 32.53 Thai baht from 32.55.
The greenback fell to 1.4051 Singapore dollars from 1.4104 and to 46.41 Philippine pesos from 46.79.


Updated : 2021-05-11 02:31 GMT+08:00