Euro steady as Greece worries rise

[NEW YORK] The euro held onto most of its post-Fed gains on Friday, slipping slightly against the dollar and the yen even as worries over Greece surged going into the weekend.

Late Friday the common currency was at US$1.1349, down from US$1.1371 late Thursday but still well above the level before the Federal Reserve showed itself more dovish on US interest rates than expected at mid-week.

Traders said there was still caution in the market - as could be seen in a significant drop in US bond yields Friday - with eurozone leaders called to an emergency meeting on Monday on the Greece crisis.

Greece is facing a June 30 deadline to obtain more bailout funds from its official creditors to be able to make a 1.5 billion euro (S$2.27 billion) debt payment to the International Monetary Fund.

The creditors, the IMF and the EU, have insisted on reforms in return for the 7.2 billion euros of new funds that Greece says it cannot accept.

Worries are that a Greek default will lead to its exit from the eurozone, an unprecedented situation that could roil financial markets.

Kathleen Brooks of Forex.com said that the euro remained stable due to sharply lower exposure to the country in the private sector and solid gains made in strengthening the other weak eurozone economies like Spain, Portugal and Ireland.

"Gone are the days when the euro would tumble 300-400 pips on a stalemate between Greece and her creditors," she said.

"Greece is considered a political not a financial problem, thus it should not have a long-term impact on euro-based assets."

AFP