Euro at 3-Month Low as Greek Concerns Weigh on Debt Sales
Friday, 11 May 2012 | 14:30
The euro rose from a three-month low against the dollar on optimism Greek political leaders will reach an agreement to form a new government that keeps the country in the single currency union.
The 17-nation currency erased losses against the yen as Antonis Samaras, leader of Greece’s New Democracy Party, said four political parties have accepted term of no exit from the euro region. The dollar and yen rose against most of their major counterparts after JPMorgan Chase & Co. said it made a surprise $2 billion trading loss, boosting demand for safer assets.
The euro aappreciated 0.1 percent to $1.2946 at 10:18 a.m. London time after falling to $1.2905, the weakest level since Jan. 23. The shared currency gained 0.1 percent to 103.44 yen after dropping as much as 0.4 percent. The dollar was little changed at 79.90 yen.
Samaras said his sole condition for supporting a coalition government was that it guaranteed Greece’s membership of the euro area.
“The only term we set is to secure Greece’s continued presence in the euro area,” he said in comments to his party’s lawmakers, televised live on state-run NET TV. “It would be suicide to isolate Greece now that conditions are changing in Europe.”
Gross domestic product in the euro area will drop 0.3 percent this year, the European Commission said, reiterating a February forecast. Greece will have the deepest contraction, with GDP shrinking 4.7 percent, while the economies of Spain and Italy are seen contracting 1.8 percent and 1.4 percent.
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