AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,941 Increased By 63.6 (0.92%)
BR30 22,802 Increased By 233 (1.03%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

euro-LONDON: The euro fell against the yen and dollar on Wednesday as investors took profit on gains made after euro zone policymakers agreed on a new debt target for Greece.

 

The yen also rose against the dollar as market players pared back expectations of aggressive monetary easing by the Bank of Japan and concerns about the US fiscal cliff increased.

 

International lenders agreed a plan to cut Greek debt earlier this week, allowing the country to avoid a chaotic default and helping push the euro to a one-month high of $1.3010.

 

But a lack of detail and growing scepticism over how Athens will implement the reforms needed to reach the new targets made investors wary of pushing the single currency higher.

 

"(A deal on Greece)is a passing of the event risk so it is people taking profits on the move higher," said Saeed Amen, currency strategist at Nomura.

 

The euro dipped 0.2 percent to $1.2921, with the 55-day moving average at $1.2918 providing support.

 

With the Greek deal out of the way analysts said investors were focusing on the US fiscal cliff -- a combination of automatic tax hikes and spending cuts due to kick in next year that could tip the world's biggest economy into recession.

 

Barclays strategists said Europe's "muddle-through approach" on Greece threatened to amplify the impact on the euro of the outcome of the US talks.

 

"If they go well, the relief on peripheral assets may have legs, including the euro. If it goes bad, even France may get questioned by an uncertain market, and we would expect the euro to suffer," they wrote in a note.

 

The US Congress pushed toward compromise on Tuesday on the fiscal cliff, but agreement still appeared elusive despite growing pressure from American business interests for action.

 

Comments by US Senate Majority Leader Harry Reid about the lack of progress by Democratic and Republican lawmakers also fanned concerns, and added to demand for the dollar and yen against perceived riskier currencies.

 

YEN REGAINS GROUND

 

The yen rose broadly as investors unwound long dollar and euro positions. The Japanese currency had lost about 4 percent against the dollar over the past two weeks as investors started to price in a possible shift in monetary policy after Japan's Dec. 16 election.

 

Shinzo Abe, likely to emerge as premier, has called for more aggressive easing, but some investors have begun to question how much impact he will have on monetary policy.

 

"Worries about the US fiscal cliff have increased, while the effects of the 'Abe trade' have faded for now," said Masashi Murata, senior forex strategist at Brown Brothers Harriman.

 

"The market wants to see what the Bank of Japan actually does," he said.

 

The dollar fell 0.4 percent to 81.80 yen, retreating from last week's 7-1/2 month high of 82.84 yen. Market players cited demand for the dollar at 81.70 yen and said this was likely to check the Japanese currency's gains.

 

The euro also fell against the yen, dropping 0.7 percent on the day to 105.65 yen, moving away from a seven-month high of 107.135 yen set on Monday.

 

Copyright Reuters, 2012

Comments

Comments are closed.