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Euro dips, markets mixed as Greece talks drag on
[HONG KONG] The euro edged down marginally in early trade on Monday and stock markets were mixed as European leaders presented Greece with a painful set of demands to secure a debt bailout or face a eurozone exit.
Investors are also nervously awaiting the start of trade in mainland China, where the government is due to release key economic indicators with markets already highly volatile.
During the high-stakes summit talks, Germany and other eurozone leaders handed Greece a brutal ultimatum for desperately needed bailout cash Sunday, with Chancellor Angela Merkel pushing for a temporary euro exit - or "time out" - if it does not agree.
Greece said the plans were "very bad", but with its banks set to run dry in days it looked to have little choice but to bow to reform demands that effectively rob Athens of control of much its finances.
In early Japanese trade the euro dipped but managed to stave off heavy losses as the talks continued in Brussels.
It eased to US$1.1133 from US$1.1149 in New York late Friday. In earlier electronic trading, the single currency fell as low as US$1.1089. It was also at 136.43 yen compared with 136.58 yen in US trade.
"Market reaction in the euro is surprisingly muted," said Steven Englander, global head of Group-of-10 currency strategy at Citigroup.
"The absence of agreement and toughness of terms are eye-catching, but investors are waiting for the outcome more than trying to anticipate it." On share markets Tokyo was up 0.90 per cent and Seoul added 0.20 per cent but Sydney dropped 0.50 per cent and Wellington eased 0.20 per cent.
While Greece's future in the eurozone hangs in the balance, attention is also on China, which releases its crucial trade statistics later in the day. The country's stock market has risen for the past two sessions but dealers remain nervous after a month of massive selling that has seen the Shanghai Composite index fall about 30 per cent, wiping trillions of dollars off valuations.
"We've got a watching brief on China. It's positive that the authorities didn't feel the need to do anything over the weekend but markets are still clearly nervous and we need to see most of the stock market open.
"There's still lots of halts," Sam Tuck, a senior currency strategist in Auckland at ANZ Bank New Zealand Ltd., told Bloomberg News.
On oil markets, US benchmark West Texas Intermediate for delivery in August edged down 56 US cents to US$52.18 a barrel while Brent North Sea crude lost 63 US cents to US$58.10.
Gold fetched US$1,162.20 compared with US$1,163.50 late Friday.