Euro up after Greek vote on austerity package

TOKYO: The euro climbed against the dollar in Asia on Thursday, as concern over Greece's debt problems eased after its parliament passed a crucial austerity package demanded by international creditors.

The euro rose to $1.4464 in Tokyo morning trading from $1.4429 in New York late Wednesday. The European common currency eased to 116.55 yen from 116.61 yen.

The dollar fell to 80.57 yen from 80.80 yen.

The Greek parliament on Wednesday approved 28.4 billion euros ($40 billion) in spending cuts, unlocking a 12-billion-euro payout from the European Union and the International Monetary Fund.

The funds represent the fifth tranche of a 110-billion-euro aid package agreed last year with the EU and the IMF, and are needed to prevent Greece defaulting on its mammoth debts.

Markets are still closely watching a second vote on the detail behind the measures that will take place Thursday.

"Although the vote outcome came in line with expectation, the market is confirming risks to the euro stemming from the Greek debt problem are diminishing step by step," said Dai Sato, dealer at Mizuho Corporate Bank.

"Upbeat stock markets are also helping improve risk sentiment, lifting the euro against the dollar," Sato said.

US and European stock markets took a cue from the news on the Greek parliament approval.

Expectation for a rate hike by the European Central Bank at its policy meeting next week helped underpin the euro against the dollar, noted Yuji Saito, foreign exchange market director at Credit Agricole in Tokyo.

European firms were also buying the euro to repatriate their overseas earnings halfway through the year, Saito told Dow Jones Newswires.

Copyright AFP (Agence France-Presse), 2011