Finance


Euro dips in Asia on Portuguese bank woes




Posted on July 11, 2014 01:59:20 PM | BREAKING NEWS



TOKYO -- Investors shifted out of the euro Friday and into the safety of the dollar and yen as a crisis at Portugal’s largest listed bank revived fears about European debt.

The euro fetched $1.3600 in Tokyo morning trade Friday, slightly down from $1.3609 late in New York and well down from 1.3640 earlier Thursday

The common currency also dipped to 137.84 yen from 137.88 yen in New York and 138.50 yen Thursday in Asia.

The dollar was changing hands at 101.35 yen, against 101.32 yen.

Markets across Europe and on Wall Street were rattled Thursday after it emerged that the parent of Banco Espirito Santo (BES) had covered up a $1.8 billion hole in its accounts and failed to make payments on some short-term debt.

All three main indexes in New York ended lower, while London, Frankfurt and Paris also saw hefty losses as the news brought back memories of the eurozone sovereign and banking debt crisis of 2011 that saw a number of nations go to the wall. Shares in Lisbon dived more than four percent.

Tokyo stocks were 0.26 percent lower by the break Friday.

"Markets are left torn between viewing this news as BES-specific or something more systematic," National Australia Bank said in a statement.

"At one point during the night...the US dollar attracted a traditional safe haven bid" alongside an equally traditional drop in the dollar-yen exchange rate, it said.

The dollar fell as low as 101.06 yen in New York as traders shifted into what is considered a safer bet in times of economic and political uncertainty.

However, in the near term the scope for the Japanese currency to rally on the back of risk-off sentiment could be limited, said Yunosuke Ikeda, head of FX strategy at Nomura Securities.

Factors favouring a yen sell-off remain in place, including expectations of a rise in US interest rates, a shift in investment strategy by Japan’s pension funds into riskier assets, and Japanese commercial demand for selling the unit, he added. -- AFP