Euro slips ahead of Germany's Greek bailout vote

TOKYO: The euro edged downward on Monday amid speculation that a much-needed bailout for Greece will be approved by the German parliament later in the day, despite some domestic opposition.

The single currency stood at $1.3449 in afternoon trade, compared with $1.3451 in New York late Friday. It bought 109.17 yen against 109.22.

German lawmakers Monday were set to vote on a further 130 billion euros ($175 billion) in loans for Greece in exchange for new austerity measures and tighter European Union and International Monetary Fund oversight.

The market believes Germany's parliament will approve the package, ahead of similar steps to be taken in the Netherlands and Finland later in the week, said Masafumi Yamamoto, chief strategist at Barclays Capital in Tokyo.

While the euro remained nearly unchanged on Monday following the recent gains, "the euro's strength will likely continue," at least for now, he told Dow Jones Newswires.

The dollar also stayed firm at 81.16 yen, keeping hold of its recent gains but a shade below the 81.20 yen seen in New York Friday.

The yen has steadily declined against the dollar since the start of the month, a trend that was magnified when the Bank of Japan expanded its monetary easing programmes. The fall in the yen has boosted the Tokyo stock market.

But the dollar's upward momentum could soon peter out as foreign speculators may start to unwind their short yen positions, said Junya Tanase, chief forex strategist at JP Morgan in Tokyo.

Previous periods of yen weakness on average lasted one to one-and-a-half months, he told Dow Jones Newswires.

"If past patterns are to be repeated, there is a high possibility that the yen's weak phase may be coming to an end," he said.

The dollar rose against other Asian currencies, gaining to 1,129.38 South Korean won from 1,124.70 won Friday, to 43.04 Philippine pesos from 42.70 pesos, to Sg$1.2571 from Sg$1.2537, and to Tw$29.59 from Tw$29.55.

It also increased to 9,160.00 Indonesian rupiah from 9,045.00 rupiah and to 30.44 Thai baht from 30.34 baht.

Copyright AFP (Agence France-Presse), 2012