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Euro under pressure after hair-raising Greek stock plunge

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The euro was under pressure on Tuesday following a sell-off in New York as a plunge on the Greek stock market revived worries about Athens' future in the eurozone.

[TOKYO] The euro was under pressure on Tuesday following a sell-off in New York as a plunge on the Greek stock market revived worries about Athens' future in the eurozone.

The single currency slipped to US$1.0936 and 135.64 yen Tuesday morning from US$1.0954 and 135.82 yen in New York.

The dollar crept up to 124.09 yen from 123.99 yen, but gains were held back by weak US and Chinese manufacturing data.

On Monday, Greece's stock exchange, resuming trade after a five-week shutdown, plunged around 20 per cent at the open before finishing down 16.23 per cent in its biggest single-day drop ever.

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Market voices on:

Adding to broader regional concerns, the 19-nation eurozone's inflation and jobless rate came in flat in July, according to data published on Friday, suggesting only modest growth.

"Concerns about the prospects for the EU economy are also putting pressure on the euro," said Shinya Harui, a Nomura Securities forex analyst.

"But a further gain in the dollar has been capped by negative US economic indicators." Data on Monday showed slightly weaker US manufacturing activity and a modest gain in consumer spending.

The focus is now on Friday's jobs reports as investors look for the latest clues about the timing of a Federal Reserve interest rate hike - a plus for the dollar.

Markets are expecting a rise as early as September, but the US central bank said any move depends on signs of strengthening in the world's top economy.

Separately, a key gauge of Chinese manufacturing activity plunged to a two-year low in July, according to figures published Monday, suggesting the world's second-largest economy is struggling.

AFP

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