Euro off highs in Asia

The euro pulled away from two-month highs against the dollar and the yen on Friday as worries over Greece's commitment to debt restructuring lingered even after it clinched a deal on fiscal reforms to secure funding and avoid default. Athens struck a long-awaited agreement on harsh austerity steps necessary for a second international bailout in two years, and a debt swap deal between Greece and its private bond holders was practically finalised.
Eurogroup chairman Jean-Claude Juncker set three conditions, however, saying the Greek parliament must ratify the package, a further 325 million euros of spending cuts needs to be found, and political assurances must be given that the plan will be implemented. This dampened risk appetite across Asian markets, and weighed on the euro which shed 0.2 percent to $1.3260, coming away from a two-month high of $1.3322 hit overnight. It failed to pierce its 100-day moving average at 1.3330 on Thursday, a level not breached since late October. "The reaction to the deal, both for the euro and equities, was muted suggesting it has been largely priced in by the market," said Teppei Ino, currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Profit-taking was also cited as a reason for the euro's losses. The single currency has gained around 5 percent from a 17-month low of $1.2624 hit in January as the market bet Greece would hammer out its second bailout deal with international lenders. The euro shed some 20 pips against the yen and fetched 102.95 yen, still not far off a two-month high hit on Thursday at 103.28 yen.
The Japanese currency has broadly softened this week on the back of offshore hedge fund selling prompted by Japan's shrinking current account surplus. Tokyo importers as well as model funds have also been spotted selling the yen. Against the dollar, the yen was little changed at 77.66, near the lowest level in two weeks.
A Tokyo-based European bank trader also said some yen long holders appear to have given up hopes of hitting 75 yen after data confirmed that Japan conducted stealth intervention following its massive yen-selling intervention on October 31. The Australian dollar fell 0.7 percent to $1.0708, extending losses as Asian bourses turned red and after the Reserve Bank of Australia said in its quarterly policy statement there will be scope for easing if the economy slows materially. The Aussie has support from daily Ichimoku charts' tenkan line at $1.0707 and 20-day moving average at $1.0609.