Euro Drifts Lower on Unresolved Greek Debt Talks
The euro lost ground Friday on uncertainty about Greece's future in the eurozone as it struck a last-minute deal to delay a debt repayment, but still faced several stumbling blocks to reaching a bailout reform agreement.
In Tokyo trading, the single currency weakened to $1.1220 and 139.63 yen from $1.1239 and 139.79 yen in New York.
Facing a Friday deadline, Greece bought time in debt crisis negotiations when it moved to bundle four International Monetary Fund loan payments into one.
The move gives Athens until the end of June to hammer out a deal to unlock billions of euros needed to service its debts. There is a fear that if it defaults it could eventually be forced out of the eurozone.
Despite easing the immediate pressure on Athens, a Greek government source said there were still key differences between the two sides, describing the creditors' position as "extreme" and "unacceptable".
Athens is seeking less harsh fiscal and reform requirements while its lenders are unhappy with Greek efforts to roll back some earlier reform promises.
"The proverbial can has been kicked down the road toward the end of the month," said Raiko Shareef, markets strategist at the Bank of New Zealand.
Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group in Tokyo, warned that the thorny issue was far from resolved.
"Under the current form of austerity, Greece's economy won't get better and it won't be able to pay its debt," he told Bloomberg News.
The dollar rose to 124.45 yen, from 124.37 yen, as investors looked to Friday's U.S. jobs data for the latest clues on the state of the world's top economy.
A strong labour report would boost the chances for a Federal Reserve interest rate hike this year, which is a plus for the dollar.
The Fed has said any rate hike would be dependent on more upbeat economic data, but on Thursday the IMF warned against an increase before 2016, saying conditions were not supportive of a move this year.
The calls came as the IMF slashed its forecasts for U.S. growth this year to 2.5 percent, from a previous estimate of 3.1 percent, citing a ports strike, bad winter weather, a strong dollar and the oil-price downturn.
The dollar was mixed against other Asia-Pacific currencies.
It strengthened to Sg$1.3481 from Sg$1.3468 on Thursday, to 13,290.00 Indonesian rupiah from 13,248 rupiah, and to 44.92 Philippine pesos from 44.86 pesos.
The greenback slipped to 63.94 Indian rupees from 64.17 rupees, Tw$ 30.86 from Tw$30.88, to 1,111.10 South Korean won from 1,112.13 won, and to 33.74 Thai baht from 33.75 baht.
The Australian dollar weakened to 77.03 U.S. cents from 77.25 cents while the Chinese yuan bought 20.03 yen against 20.02 yen.
