(Bloomberg) -- The euro weakened as talks between Greece and its creditors in the region ended without an agreement on the nation’s debt and bailout program.
The common currency dropped against all of its 16 major counterparts, falling most versus the New Zealand dollar and Japan’s yen. A meeting of euro-area finance ministers broke up after Greece’s newly elected government, which has sought to renegotiate the terms of international financial aid, said it couldn’t accept proposals for it to stick to the terms of the current agreement.
“Indications no deal this evening is forthcoming, and that the gap between the Eurogroup and the Greek administration is still wide, have weighed on the euro,” said Josh O’Byrne, a foreign-exchange strategist at Citigroup Inc. in London.
The 19-nation shared currency fell 0.6 percent to $1.1323 at 6:33 p.m. London time, having climbed as much as 0.3 percent earlier on Monday. It dropped 1 percent to 134.06 yen. Japan’s currency strengthened 0.3 percent to 118.40 per dollar.
Greek Finance Minister Yanis Varoufakis led a Greek government delegation to Brussels with the aim of winning a six-month bridge package to give Greece the time and financial space to negotiate a post-bailout settlement. Creditors said that the Greek government must abide by the agreements struck by previous administrations.
The euro weakened 4.1 percent this year against a basket of developed-nation peers tracked by Bloomberg Correlation-Weighted Indexes as the European Central Bank prepared a bond-buying program and Greek elections roiled the nation’s bond and stock markets. The dollar rose 3.2 percent while the yen gained 4.5 percent.
Yen Gains
The yen advanced for a third day on Monday, its longest rally in a month, after Japan’s economy minister said the conditions are favorable for the country’s exit from deflation and a report showed gross domestic product grew in the three months ended Dec. 31, halting two quarters of contraction.
Investors had already trimmed wagers that the yen would decline to the least since July amid speculation the Bank of Japan will refrain from expanding stimulus for now after the economy pulled out of a recession last quarter. The difference in the number of wagers on a drop against the dollar compared with those on a gain narrowed to 55,124 contracts in the week ended Feb. 10, the least since the period ended July 22.
“The data may encourage some to pare back on bearish yen positions for now, partly because the decline at the end of last year was excessive,” said Carl Hammer, chief currency strategist at SEB AB in Stockholm. “The BOJ will ease policy further in April, and therefore the yen correction we see now is likely to be temporary.”
BOJ Decision
Economy Minister Akira Amari said Monday that employment and income conditions may continue to improve.
The BOJ is set to announce a policy decision on Wednesday. None of the 35 analysts surveyed by Bloomberg News Feb. 5-10 predicted additional stimulus will be announced this week. Still, 26 analysts in the survey said the central bank will ease policy by October.
“It’s too early for the BOJ to continue more policy easing,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “They will announce more policy easing on April 30. That will be a major catalyst for dollar-yen to lift significantly.”
New Zealand’s dollar jumped to a three-week high against the greenback after data showed the South Pacific nation’s retail sales rose more than economists forecast in the fourth quarter. It strengthened against all of its 16 major peers, adding 0.5 percent to 74.91 U.S. cents after touching 75.28, matching the Jan. 23 high.
The common currency dropped against all of its 16 major counterparts, falling most versus the New Zealand dollar and Japan’s yen. A meeting of euro-area finance ministers broke up after Greece’s newly elected government, which has sought to renegotiate the terms of international financial aid, said it couldn’t accept proposals for it to stick to the terms of the current agreement.
“Indications no deal this evening is forthcoming, and that the gap between the Eurogroup and the Greek administration is still wide, have weighed on the euro,” said Josh O’Byrne, a foreign-exchange strategist at Citigroup Inc. in London.
The 19-nation shared currency fell 0.6 percent to $1.1323 at 6:33 p.m. London time, having climbed as much as 0.3 percent earlier on Monday. It dropped 1 percent to 134.06 yen. Japan’s currency strengthened 0.3 percent to 118.40 per dollar.
Greek Finance Minister Yanis Varoufakis led a Greek government delegation to Brussels with the aim of winning a six-month bridge package to give Greece the time and financial space to negotiate a post-bailout settlement. Creditors said that the Greek government must abide by the agreements struck by previous administrations.
The euro weakened 4.1 percent this year against a basket of developed-nation peers tracked by Bloomberg Correlation-Weighted Indexes as the European Central Bank prepared a bond-buying program and Greek elections roiled the nation’s bond and stock markets. The dollar rose 3.2 percent while the yen gained 4.5 percent.
Yen Gains
The yen advanced for a third day on Monday, its longest rally in a month, after Japan’s economy minister said the conditions are favorable for the country’s exit from deflation and a report showed gross domestic product grew in the three months ended Dec. 31, halting two quarters of contraction.
Investors had already trimmed wagers that the yen would decline to the least since July amid speculation the Bank of Japan will refrain from expanding stimulus for now after the economy pulled out of a recession last quarter. The difference in the number of wagers on a drop against the dollar compared with those on a gain narrowed to 55,124 contracts in the week ended Feb. 10, the least since the period ended July 22.
“The data may encourage some to pare back on bearish yen positions for now, partly because the decline at the end of last year was excessive,” said Carl Hammer, chief currency strategist at SEB AB in Stockholm. “The BOJ will ease policy further in April, and therefore the yen correction we see now is likely to be temporary.”
BOJ Decision
Economy Minister Akira Amari said Monday that employment and income conditions may continue to improve.
The BOJ is set to announce a policy decision on Wednesday. None of the 35 analysts surveyed by Bloomberg News Feb. 5-10 predicted additional stimulus will be announced this week. Still, 26 analysts in the survey said the central bank will ease policy by October.
“It’s too early for the BOJ to continue more policy easing,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “They will announce more policy easing on April 30. That will be a major catalyst for dollar-yen to lift significantly.”
New Zealand’s dollar jumped to a three-week high against the greenback after data showed the South Pacific nation’s retail sales rose more than economists forecast in the fourth quarter. It strengthened against all of its 16 major peers, adding 0.5 percent to 74.91 U.S. cents after touching 75.28, matching the Jan. 23 high.
