Euro Higher Against Dollar, Yen Ahead of Greek Talks

 
   By Hiroyuki Kachi 
 

        The euro continued to gain ground against the dollar and the yen in Asia trade Monday, though many investors chose to stay on the sidelines with no fresh trading cues ahead of last-ditch Greek bailout talks in Brussels later in the day.
        Around 0450 GMT, the euro was at $1.1398 after briefly touching $1.1400, compared with $1.1350 late Friday in New York. The common currency rose against the yen to Y139.86 from Y139.31.
        Ahead of key meetings of eurozone finance ministers and heads of government Monday, Greek officials are working on a last-minute set of proposals to put to the country's creditors. If those meetings fail to break the deadlock, Greece will almost certainly be unable to pay about EUR1.54 billion due to the International Monetary Fund the same day.
        But any ripple effect from a possible Greek default would only be limited since major institutional investors have only a small amount of exposure to Greece, as has been pointed out by many market observers, said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley.
        "There are signs that Greece will be handled as a local issue," Mr. Ueno said.
        The single currency has gained traction in recent trade due to the unwinding of the euro short positions, which had become too lopsided in anticipation of the launch of the European Central Bank's massive asset-purchase program earlier in the year, he said, adding that this trend would change.
        "Once the July-September quarter starts with short positions much lighter, there may be a resumption of euro selling and dollar buying on the cue of diverging monetary policy," he said.
        IG Securities market analyst Junichi Ishikawa said softness in the dollar was the main factor driving up the euro.
        "I think the most important point surrounding the euro is the regaining of downward pressure on the dollar," said Ishikawa in a morning note.
        The continued caution signalled by the Federal Reserve last week at its policy meeting, strengthened dollar selling pressure, outstripping euro selling pressure on headlines over the Greek bailout impasse, he said.
        In other currency pair, the greenback was unchanged at Y122.70.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.20% at 85.47.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        June 22, 2015 01:56 ET (05:56 GMT)

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