Euro slumps, hits 10-year low versus yen on Greece woes

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Euro slumps, hits 10-year low versus yen on Greece woes

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The euro slumped in Asian trade on Monday on deepening concerns over a possible default by Greece.

12 September,2011 08:02 am

The euro hit 104.90 yen in early trade, its lowest level since July 2001, compared with 107.66 yen on Friday. By 0140 GMT it had strengthened to 105.35. The euro was also lower against the dollar, at $1.3594 from $1.3649 Friday.The dollar was rangebound at 77.48 yen against 77.58 yen.We are watching Greece, and only Greece, Satoshi Tate, a senior dealer at Mizuho Corporate Bank, told Dow Jones Newswires. Conditions are getting very serious and everyone is worried how the issue will unfold.The euros slide sent Asian stocks tumbling, with Tokyos Nikkei slumping nearly 2 percent and Hong Kong shares off more than 3 percent in early trade, and prompted speculation of a possible euro-buying intervention by Japan.Debt-ridden Greece Sunday announced two billion euros in new budget cuts demanded by the EU and the IMF for its rescue package, as Germany warned a Greek orderly default could not be ruled out.EU economy commissioner Olli Rehn said Sunday a team of experts would head to Athens in the next few days to look at a new tranche of Greeces 2010 rescue package.Once Greece meets the conditions, I expect the review by the troika could be concluded by the end of September, he said, referring to the European Commission, the European Central Bank and International Monetary Fund.The troika of lenders had left Greece earlier this month because of the governments lack of progress on deficit reduction and meeting conditions for the next tranche of its 2010 bailout plan.Meanwhile, Germanys Economy Minister Philipp Roesler pointedly said, in a column to be published Monday, that Europe could no longer rule out an orderly default for Greece as it struggles with it crippling debt.On Saturday Der Spiegel magazine reported that the German government was preparing two contingency plans in the event of a Greek default.Adding to ongoing concerns about the eurozone debt crisis was the unexpected resignation of Germanys Juergen Stark, the ECBs chief economist and a member of the executive board, well before the end of his term of office in May 2014.ECB watchers suggested that his exit shows the central bank is deeply split over its approach to handling the sovereign debt crisis.