Euro Drops Versus Dollar, Yen as Banks Say No Deal Yet on Greece
Oct. 27 (Bloomberg) -- The euro fell as European leaders failed to reach an agreement with banks on a deal for bondholder losses as part of a second Greek bailout.
Demand for the 17-nation currency was also dented before a report that economists said will show European confidence in the economic outlook dropped in October to the lowest in almost two years. The currency yesterday pared a loss against the dollar as leaders said they reached agreement on a plan to recapitalize banks. The dollar held a gain from yesterday against the yen after Japanese Finance Minister Jun Azumi said he hopes for positive news from a Bank of Japan meeting today.
"Plans are emerging, but the market is still not certain if they are enough," said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. "The euro is also under some pressure because of weakening data in Europe."
The euro dropped 0.2 percent to $1.3876 as of 8:01 a.m. in Tokyo and slid 0.2 percent to 105.69 yen from 105.93 in New York yesterday, when it rose 0.1 percent. The dollar traded at 76.21 yen after yesterday rising 0.1 percent to 76.18.
There has been no agreement on any Greek deal or a specific "haircut," Charles Dallara managing director of the Institute of International Finance said in an e-mailed statement yesterday.
The IIF, which represents more than 450 financial companies, said it remains open to a dialog in search of a voluntary agreement, adding that there is no agreement on any element of a deal.
French President Nicolas Sarkozy, German Chancellor Angela Merkel, International Monetary Fund Managing Director Christine Lagarde and European Union President Herman Van Rompuy broke away from a euro-area summit to meet with Dallara, an EU official said in Brussels.
An index of executive and consumer sentiment in the euro area fell to 93.8 from 95 in September, the European Commission in Brussels is forecast to say today, according to a Bloomberg News survey of economists. That would be the lowest since November 2009.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
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