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Euro stalls on lack of Greek deal

Euro stalls on lack of Greek deal

Thursday, February 12 08:57:32

The euro dipped on Thursday after regional finance ministers failed to secure a debt agreement with Greece, while investors readied for a possible interest rate cut in Sweden.

Most economists polled by Reuters reckon the Swedish central bank will keep its main repo rate at zero, but some expect the Riksbank to deal with falling inflation by cutting the main rate into negative territory and possibly signalling a later lift-off date for future hikes.

Ahead of the rate decision, due at 0830 GMT, the Swedish crown inched up 0.2 percent to 9.4854 crowns per euro .

Against the dollar, the euro slipped 0.1 percent to $ 1.1326 from a high of $ 1.1353. It eased to 135.95 yen , having earlier scaled a three-week peak of 136.70.

After a seven-hour meeting, euro zone finance ministers were unable to agree with Greece on a way to break the deadlock over the country’s bailout and even on a joint statement on the next procedural steps.

Though both sides played down the setback, the news poured cold water on optimism sparked after CNBC had reported earlier that an agreement was reached in principle.

“The lack of progress at the meeting in Brussels suggests that they’re not getting any closer (to an agreement) at the moment. That is going to … keep the euro very much under pressure,” said Ian Stannard, head of European FX strategy at Morgan Stanley in London.

Stannard said he expected the Riksbank to cut both its main repo rate and its deposit rate, action which would see the Swedish crown come under heavy pressure.

The dollar slipped slightly to 120.25 yen but remained within striking distance of a five-week peak of 120.48 hit the previous day. (Reuters)

For more visit: www.businessworld.ie

 

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