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TOKYO: The euro eased in Asia on Wednesday as investors moved to reap profits from the currency”s overnight gains, after the Greek government survived a crucial vote of confidence, dealers said.
The euro fell to $1.4350 in Tokyo morning trade from $1.4408 in New York late Tuesday. The European single currency also softened to 115.17 yen from 115.53 yen.
The dollar was rangebound at 80.24 yen against 80.22 yen.
The Greek government won a critical vote of confidence in parliament on Tuesday as it struggles to gain support for extra austerity measures and avoid defaulting on its debt.
“The euro temporarily got a boost in the wake of the news, but investors moved to lock in profits after the euro gained overnight on expectation for the positive outcome of the vote,” said Tomohiro Ishikawa, dealer at Chuo Mitsui Trust and Banking.
“The market is unlikely to push the euro higher for now as the Greek debt problem is far from over,” Ishikawa said.
Greek Prime Minister businessrge Papandreou must now persuade parliament to approve a five-year, 28 billion euro package of tax increases and spending cuts to win a new bailout and avoid a possible fresh global economic crisis.
The stability of the euro has been thrown into doubt by the Greek debt crisis, as investors fear that a default by Athens would have huge repercussions throughout Europe”s financial sector.
Markets worry a default on Greek debt could trigger a cascade of problems in Europe”s bigger economies, including Spain. Such a domino effect could again hobble the global financial system, much like the massive crisis of 2008.
The fact that Greece”s prime minister survived a crucial confidence vote in parliament late Tuesday is “one step forward” for Greece to receive funds, Koji Fukaya, director of global foreign exchange research at Credit Suisse Securities Japan, said.
“The next hurdle, which appears to be more difficult, is whether the government will be able to pass through its five-year austerity measures in the parliament next week,” Fukaya told.
Europe gave Greece a two-week deadline on Monday to drive through painful new austerity measures in order to gain access to emergency funds needed to avert a default.
Investors were also looking to a US Federal Reserve meeting for further clues of monetary policy in the world”s largest economy, dealers said.
Investors are awaiting the outcome of the meeting of the Federal Open Market Committee, the body within the US Federal Reserve that sets interest rates.
Fed Chairman Ben Bernanke is to speak after the US central bank”s policy-setting panel ends its meeting later in the global day. (AFP)
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