Euro Steady as Any Greece Deal Pushed to Weekend

 
   By Kosaku Narioka 
 

        The euro remained steady on Friday in Asia as market participants awaited a Greek debt agreement, which was pushed back at least until the weekend.
        European finance chiefs pushed off talks to seal a Greek bailout deal after ending another meeting without an agreement, leaving only days to keep Athens from defaulting on a loan payment early next week.
        It's hard to predict initial market reactions to a potential Greek agreement because over the past few sessions good news toward the deal often pushed the common currency lower, Tokyo-dealers said.
        Still, in the longer-term, the euro is likely biased downward because any debt deal would only kick the can down the road, leaving fundamental problems unresolved, said Osao Iizuka, Head of FX Trading at Sumitomo Mitsui Trust Bank.
        The European Central Bank continues its version of quantitative easing, helping the common currency to move lower, at a time when the U.S. Federal Reserve is moving toward raising interest rates.
        "The main scenario I envision is that European authorities will keep Greece in the euro system and devalue the currency itself (to help the regional economy)," said Toshihiko Sakai, senior manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Corp. Under that scenario, Germany would have fewer complaints because its mighty export sector benefits from weaker euro.
        The risk remains that there will no deal by Monday Asia morning, in which case volatility would increase and safe-haven currencies like the yen would strengthen, dealers said.
        The euro was trading at $1.1190 as of 0450 GMT, compared with $1.1204 late Thursday in New York, according to EBS.
        Meanwhile, the yen rose slightly as Japanese exporters exchanged dollars earned overseas for yen as the quarter winds down. The dollar was down at Y123.42 from Y123.64. The euro was also down at Y138.10 from Y138.55.
        Write to Kosaku Narioka at kosaku.narioka@wsj.com
        (END) Dow Jones Newswires

        June 26, 2015 01:29 ET (05:29 GMT)

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