Euro gains in Asia as Greece deal clinched

Euro gains in Asia as Greece deal clinched

TOKYO - The euro was stronger in Asian trading on Tuesday as investors breathed a sigh of relief on news of a long-awaited bailout deal for Greece, easing fears Athens could tumble into bankruptcy.

The 17-nation currency bought US$1.2980 (S$1.5855) and 106.46 yen (S$1.586) in Tokyo morning trade after briefly topping US$1.30 for the first time in about a month.

That was up from US$1.2971 and 106.38 yen in New York trade late Monday, although the euro eased slightly after the Greece announcement.

The dollar was flat at 82 yen.

"The pair (euro/dollar) temporarily climbed above 1.3000 earlier on the first round of news," Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires.

But Suzuki added that the euro now faced downward pressure amid profit-taking and investors selling the currency following confirmation of an agreement, with the focus shifting to a budgetary impasse in Washington.

Following marathon talks, Eurozone finance ministers struck a deal with the International Monetary Fund to slash Greece's massive debt, freeing up the payment of about 43.7 billion euros (S$69 billion) in loans to Greece from December 13.

A statement after 13 hours of Eurogroup talks gathering finance ministers, the IMF and the European Central Bank, said the rescue loans would be paid in four instalments through the end of March, conditional on the implementation by Athens of tax reforms agreed with creditors.

In a key step towards restoring financing to Athens, Greece's public creditors agreed to take measures to bring down the country's debt-to-GDP ratio from an estimated 144 per cent to 124 per cent come 2020, European Union sources said.

Dealers said investors would likely turn their focus to the so-called fiscal cliff of spending cuts and tax hikes due to come into effect on January 1, possibly throwing the United States into recession, unless a bitterly divided US Congress reaches a new spending deal.

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