Euro firms in Asia ahead of EU summit

TOKYO: The euro firmed against other major currencies in Asia on Wednesday ahead of a crucial European Union summit that will focus on hammering out a plan to contain the eurozone debt crisis.

The unit fetched $1.3403 and 104.24 yen in early trade, compared with $1.3397 and 104.14 yen in New York late Tuesday.

The dollar bought 77.80 yen, compared with 77.70 yen.

The euro will likely be volatile as investors watch for the latest news on Europe's fiscal problems in the lead up to the two-day summit starting Thursday, dealers said.

"Since the region is clearly in a crisis mode, it might be easy for leaders to persuade the public to accept some breakthrough measures," said one senior dealer at a major Tokyo bank.

The summit is seen as crucial to tackling the debt contagion threatening the eurozone and the future of the bloc's single currency.

Leaders were expected to focus on ways to boost the region's budgetary discipline.

A call by French President Nicolas Sarkozy and German Chancellor Angela Merkel to set uniform tough budget standards across the eurozone raised hopes that the bloc would finally take decisive moves to end its fiscal crisis.

The pair backed automatic sanctions against member states whose budget deficits rise above three percent of gross domestic product.

On Tuesday Standard & Poor's warned Germany, France and 13 other eurozone members that they faced possible credit downgrades.

Copyright AFP (Agence France-Presse), 2011