Euro stays weak in Asia after ECB let-down


The euro remained under pressure in Asian trade Friday after suffering a sell-off by investors disappointed by European Central Bank’s lack of action to fight the eurozone debt crisis.
The single currency bought $1.2175 and 95.18 yen in Tokyo afternoon trade, compared with $1.2178 and 95.26 yen in New York late Thursday.
It tumbled from $1.2250 and 96.12 in Asia Thursday.
The dollar was at 78.17 yen, almost flat from 78.22 yen.
The euro was hit on Thursday after ECB head Mario Draghi said there would be no immediate measures to ease debt pressures on troubled countries such as Spain and Italy while adding only that it “may” resume bond purchases.
He also insisted the onus was on eurozone governments, saying they must carry out promised reforms and turn to the region’s bailout funds before the ECB could step in.
Borrowing costs for Spain and Italy moved back upwards after the news, with Madrid back above the seven percent danger zone considered too high for governments to sustain.
Global markets had risen this week after he said last Thursday that the bank would do “whatever it takes” to preserve the embattled single currency.
“The ECB disappointed markets,” said Credit Suisse analyst Hiromichi Shirakawa.
“It was obvious that Germany would oppose” providing fiscal assistance to troubled countries, he said in a note.
“The ECB gave fuel to the flames of markets. It should put out the fire by itself,” Shirakawa said.
The dollar firmed against other Asia-Pacific currencies.
It rose to Sg$1.2481 from Sg$1.2468 on Thursday, to 56.15 Indian rupees from 55.72 rupees, and to 1,135.40 South Korean won from 1,129.60 won.
It also edged up to 41.93 Philippine pesos from 41.85 pesos, to 9,476.00 Indonesian rupiah from 9,475.00, to 31.62 Thai baht from 31.52 baht, and to Tw$30.00 from Tw$29.95.
The Australian dollar traded at $1.0475 against $1.0483 while the Chinese yuan bought 12.24 yen against 12.31 yen.