SINGAPORE: The euro eased slightly against the US dollar in Asia Friday but the unit was supported by confidence the European Union would come to the rescue of embattled Portugal, analysts said.
The single currency erased earlier gains to sit at $1.4172 in the afternoon from $1.4176 late Thursday in New York but it rose to 114.75 yen from 114.12.
The greenback was slightly lower against the Japanese yen, at 80.99 compared with 81.01.
Expectations that European leaders would support Portugal after its prime minister resigned and government fell following its failure to pass through parliament an austerity package were propping up the euro, analysts said.
Economists at Action Forex said traders were confident that the EU, led by economic powerhouse Germany, would bail out Lisbon after it did the same for Greece and Ireland last year.
"The euro is stronger because the Europeans will do as they have twice before, they will bail out Lisbon," they said in a report.
"The European leaders will not permit a default, staggering nations will be propped up and Germany will pay," it added.
"If the path to this conclusion was messy, the results sometimes tardy and not always to the liking of commentators, the Europeans have proved capable and willing to defend their currency and the union that stands behind it."
The euro has also been given support by talk of an interest rate hike soon.
And expectations were heightened Thursday when European Central Bank (ECB) chief economist Juergen Stark pushed for a rate rise to tame inflation, saying the region could withstand it.
Against other Asian units, the dollar fell to 8,708.5 Indonesian rupiah from 8,721 on Thursday, to 30.24 Thai baht from 30.29, to Sg$1.2605 from Sg$1.2643 and to 1,113.55 South Korean won from 1,122.14.
It also slipped to 43.33 Philippine pesos from 43.43 and to Tw$29.50 Taiwan dollars from Tw$29.59.
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