Updated on
Summary The euro falls on renewed worries over the European debt crisis.
The euro fetched $1.3712 and 107.12 yen in Tokyo afternoon trade, compared with $1.3697 and 107.29 yen in New York late Tuesday in New York.The dollar edged down to 78.12 yen from 78.34 yen, moving narrowly in a tug-of-war between the effect of Japans yen-selling intervention Monday and safe-haven purchases.The euro had tumbled as debt-ridden Greeces abrupt call Tuesday for a referendum over a eurozone bailout package saw debt crisis fears grip markets anew.But the drop came to a lull with market players expecting downbeat projections from the US central bank later Wednesday.The Wall Street Journal reported that the US Federal Reserve at the end of a two-day meeting of its policy-setting Open Market Committee is expected to lower its growth projections through 2013 and predict unemployment could remain high.Investors are adjusting positions before the FOMC, and also before the other events this week such as the ECB and G20 (meetings), Motonari Ogawa, a senior foreign exchange dealer at Barclays Capital, told Dow Jones Newswires.The Group of 20 advanced and developing nations will discuss the issue when they start a meeting in Cannes, France, on Thursday, while the European Central Bank will hold a one-day executive meeting in Frankfurt on the same day.But dealers noted the dollars slight falls Wednesday do not imply that the euro is off the hook.Greece plunged the eurozone back into crisis and markets into panic on Tuesday with the shock announcement of a referendum on the debt rescue package reached just days ago after tough negotiations.Prime Minister George Papandreous decision to hold a confidence vote on Friday and then a national vote on the debt deal stunned investors, angered EU leaders and left the eurozone back at square one.If the bailout plan is rejected in the referendum, a Greek default will be in sight, said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.The euro had risen after the bailout plan was agreed on hopes (of a solution to the crisis) but there was no substantial change in the situation, Kamei said.The dollar was higher against most other Asian currencies.The greenback rose to Sg$1.2724 from Sg$1.2617 on Tuesday, to 1,122.40 South Korean won from 1,112.70, to Tw$30.13 from Tw$30.03, and to 8,950.00 Indonesian rupiah from 8,825.00.It also firmed to 42.88 Philippine pesos from 42.61 while holding steady at 30.80 Thai baht.
