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Euro stays weak after EU summit
Economics

Euro stays weak after EU summit

24.05.2012 From our online archive
The euro sat close to 22-month lows against the dollar Asia on Thursday after European Union leaders' pledge of a united front against the debt crisis failed to investors.

(AFP) The euro sat close to 22-month lows against the dollar Asia on Thursday after European Union leaders' pledge of a united front against the debt crisis failed to investors.

The single currency bought $1.2572 in Tokyo afternoon trade against $1.2582 in New York late Wednesday. It had fallen to $1.2545 in Europe Wednesday, its lowest since July 2010.

Against the Japanese currency, the euro fetched 99.93 yen against 99.96 in New York, where the European unit fell below the 100 yen mark for the first time since early February.

At one point in New York it slumped to 99.53 yen before recovering.

The dollar changed hands at 79.48 yen against 79.45 yen in New York.

Traders kept the euro under pressure, with an apparent lack of consensus in Europe on how to deal with the debt crisis seen as a sign that market turmoil is set to continue, dealers said.

"A sense of caution is hanging over the world," Japan's Finance Minister Jun Azumi told reporters as EU leaders closed their talks.

At the end of the informal summit, European Union leaders reiterated that they supported Greece's continued euro membership as long as it honors its commitments to fiscal consolidation and structural reforms.

But they sent mixed messages on steps to deal with the widening crisis, such as a proposal to issue eurozone bonds to reduce borrowing costs for struggling countries.

French President Francois Hollande stepped up his crusade Thursday to convince eurozone nations to share debt between rich and poor despite resistance from Germany.

European leaders "are speaking about the same subject, but what they are saying is so different from each other," said Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.

The dollar was trading broadly higher against other Asian currencies.

It rose to 1,177.85 South Korean won from 1,171.90 won Wednesday, to 9,324.00 Indonesian rupiah from 9,316.00 rupiah and to 31.60 Thai baht from 31.51 baht.

It also gained to 43.53 Philippine pesos from 43.36 pesos and to Tw$29.56 from Tw$29.54 but fell to Sg$1.2759 from Sg$1.2769.