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Euro edges up ahead of key Greece talks

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The euro rose in Asia Wednesday, with investors calm ahead of talks between Greece and its creditors as it seeks to renegotiate a bailout deal, while the dollar firmed against the yen on expectations the Federal Reserve will hike interest rates.

[SINGAPORE] The euro rose in Asia Wednesday, with investors calm ahead of talks between Greece and its creditors as it seeks to renegotiate a bailout deal, while the dollar firmed against the yen on expectations the Federal Reserve will hike interest rates.

The euro bought US$1.1325 and 135.38 yen in Singapore, against US$1.1315 and 135.15 yen in New York Tuesday, while the greenback rose to 119.53 yen from 119.44 yen.

Japanese financial markets were closed Wednesday for a public holiday.

On Wednesday Greece's new leadership will seek a cash lifeline at an emergency meeting of eurozone finance ministers, presenting a plan aimed at rewriting some of the terms of its 240 billion euro bailout.

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But in a sign of the tense negotiations ahead Prime Minister Alexis Tsipras told parliament he would not bow to German demands that the country first complete a pending bailout loan agreement.

German Finance Minister Wolfgang Schaeuble had said earlier in the day that "it's over" if Greece does not accept the final tranche of the aid programme, according to Bloomberg News.

"There is no clear conviction that Greece would reach a compromise with its creditors over its bailout programme ahead of today's emergency meeting in Brussels," Singapore's DBS Bank said.

It said however that "there is no panic" over the risks of Greece exiting the currency union as the eurozone is "less vulnerable" now compared with 2010, when the region's debt crisis was at its height.

Banks have less exposure to Greece and the European Central Bank has moved to boost growth by easing monetary conditions and rolling out a stimulus package.

There will be high political drama at the talks in Brussels, Phillip Futures said, adding: "We think that a deal would eventually be reached, but there will be bumps and bruises along the way." The dollar resumed its upward trend, with analysts saying the Federal Reserve would likely raise interest rates by middle of the year as the world's top economy continues to recover.

"The US dollar is expected to continue appreciating... with the rate hike looking like an imminent possibility," Phillip Futures said in a market commentary.

"We think it (US rate hike) will happen in June."

AFP

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