Euro beset by Greek worries, RBA minutes eyed

By Anirban Nag

SYDNEY (BestGrowthStock) – The euro was mired near 9-month lows on the U.S. dollar on Tuesday as the outcome of a meeting of euro zone finance ministers failed to instill confidence that Greece’s debt problems will be resolved quickly.

Eurogroup chief Jean-Claude Junker said euro zone finance ministers had agreed Greece should propose new measures by March 16 to meet deficit targets and if Greece appears to be off course, additional measures will be requested.

“These statements do not seem to give a great deal of confidence to markets that the situation will move forward,” said Jonathan Cavenagh, currency strategist at Westpac. “The market is heavy on the euro and it is a sell on a multi-month basis.”

The euro was on the defensive at $1.3597, not far from Friday’s nine-month low of $1.3532. The single currency has shed nearly 10 percent since late 2009 as worries over whether Greece could service its debt mounted.

Also weighing down on the euro were concerns Spain and Portugal could face similar debt problems and Europe’s post-recession recovery could falter.

Latest data from the Commodity Futures Trading Commission show currency speculators ran up a record short euro positions in the week to Feb 9.

Traders say any positive development out of the euro zone should lead to some of those short positions being unwound, but overall, the sentiment toward the euro remained bearish.

The euro was marginally higher on the yen, climbing to 122.45 yen, up from 122.29 yen late on Monday in London. Markets in the U.S. were shut on Monday for a holiday.

Activity in Asia is expected to remain sluggish due to Chinese new year holidays.

The dollar index (Read more about the global trade. ) (.DXY: ) was slightly higher at 80.381, in sight of its recent high of 80.748 struck late last week, which was its highest level since July 2009.

The dollar was marginally lower in the yen, slipping to 90.02 yen from 89.98 on Monday.

All eyes are on minutes from the Reserve Bank of Australia’s (RBA) last board meeting. At that meeting, the RBA stunned markets by keeping interest rates unchanged at 3.75 percent. Many investors are unsure how the RBA will act at its next policy meeting on March 2 and whether it will extend its pause.

So they are likely to seize on any clues from the RBA as to why it kept rates steady. Still, the minutes are unlikely to be very hawkish and traders do not expect the Aussie to get much of a boost. The Australian dollar inched up to $0.8888, from $0.8885 late in London on Monday.

Concerns about Dubai World’s debts should also keep demand for higher-yielding currencies muted and keep safe-haven inflows into the U.S. dollar very much alive.

Stock Today

(Editing by Balazs Koranyi)

Euro beset by Greek worries, RBA minutes eyed