Subscribe

Euro surges on inflation as investors seek clarity on Greece

The euro rose nearly 1 percent against the dollar on Tuesday, as investors sought clarity over Greece's debt crisis. 

  • close
    Greek Prime Minister Alexis Tsipras (R), Deputy Prime Minister Yannis Dragasakis (2nd R), Finance Minister Yanis Varoufakis (2nd L) and Economy Minister George Stathakis (L) attend a meeting at the Finance ministry in Athens on Wednesday.
    Alkis Konstantinidis/Reuters
    View Caption
  • About video ads
    View Caption
of

European shares dipped on Tuesday while German bond yields rose, with investors scrabbling for clarity over whether a high-level meeting on Greece's debt crisis might herald a significant breakthrough.

The euro rose nearly 1 percent against the dollar, which earlier hit a 12 1/2-year high against the yen, but traders said this was related to an above-forecast rise in euro zone inflation rather than to the Greek drama.

U.S. stocks looked set to open lower, according to index futures.

The leaders of Germany and France and Greece's international creditors agreed late on Monday to work with "real intensity" as they try to reach a deal that would prevent Athens from defaulting and potentially leaving the euro zone.

Greek Prime Minister Tsipras said Athens had sent creditors a "comprehensive" and "realistic" package of reforms and urged Europe's leaders to accept it.

"The fact that five such political and financial heavyweights met about Greece means they are trying to force a break in the political deadlock and that's a positive development that's likely to lift risk sentiment. But we will have to wait to see the Greek reaction," said KBC strategist Mathias van der Jeugt.

Athens is due to make a 300 million euro debt repayment to the International Monetary Fund on Friday.

The pan-European FTSEurofirst 300 stock index fell 0.5 percent. Germany's DAX was down 0.6 percent, as was the main Athens stock index.

"The real money is still sitting on the sidelines because God knows what's going to happen to Greece," said Justin Haque, a trader at brokerage Hobart.

Yields on safe-haven German 10-year bonds rose 8.5 basis points to 0.6 percent, while those on lower-rated Spanish, Italian and Portuguese debt touched their highest of the year after the data showing inflation resumed in the euro zone last month.

Prices rose 0.3 percent, beating forecasts of a 0.2 percent increase.

Earlier, Asian shares fell for a second day as a strong dollar weighed on commodity prices.

MSCI's main index of Asia-Pacific shares, excluding Japan, fell 1.1 percent and Tokyo's Nikkei closed down 0.1 percent.

China's CSI300 index of the biggest listed companies in Shanghai and Shenzhen rose 1.7 percent. After rising almost 5 percent on Monday, Chinese indexes have regained nearly all the ground lost in a sell-off last Thursday.

The euro was up 0.9 percent at $1.1022.

"A spike higher in the euro near the 50-day moving average, helped by the better Euro-area consumer price inflation, is putting pressure on the dollar," said Keng Goh, a strategist with RBC Capital Markets in London.

Earlier, the dollar rose to more than 125 yen for the first time since 2002, peaking at 125.07, before retreating. It last stood at 124.74 yen, flat on the day.

Aussie

The Australian dollar was up 1 percent at $0.7680 after the Reserve Bank of Australia kept interest rates steady and did not offer a clear bias to ease policy again.

Oil prices rose as strong demand outweighed expectations that the Organization of the Petroleum Exporting Countries (OPEC) would not cut production when it meets in Vienna on Friday. Brent crude was up 41 cents at $65.29 a barrel.

Gold held steady at $1,190.46 an ounce, down from Monday's peak above $1,200.

(Additional reporting by Emelia Sithole-Matarise, Francesco Canepa and Jamie McGeever in London, Lisa Twaronite in Tokyo; editing by John Stonestreet and Gareth Jones)

About these ads
Sponsored Content by LockerDome
 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
FREE Newsletters
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK