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FOREX-Euro hits all-time low vs Swiss franc; Greek aid eyed

Published 03/23/2010, 08:40 PM
Updated 03/23/2010, 08:56 PM

* Euro hits record low vs Swiss franc, 3-wk low vs US dlr

* Germany signals support of European aid for Greece

* But details cautiously eyed ahead of a EU summit

By Satomi Noguchi

TOKYO, March 24 (Reuters) - The euro fell to an all-time low against the Swiss franc on Wednesday despite Germany's signalling for the first time the previous day that it may accept European financial aid for debt-laden Greece as a last resort.

The euro also dropped to a three-week low versus the dollar as investors cautiously eyed details on aid for Greece ahead of a European Union summit later this week.

Germany pegged its support to several conditions, including the need for the International Monetary Fund to make a "substantial contribution" to any rescue.

Analysts said uncertainty over a quick resolution for Greece, combined with lacklustre euro zone economic growth, could prevent the European Central Bank from raising interest rates until well into next year, adding to selling pressure.

"Be it the EU or the IMF, how either of them would rescue Greece remains uncertain. The euro looks set to trade defensively in the near term," said Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo.

The euro slid as low as 1.4232 francs on trading platform EBS, a record low, before trading at 1.4243 francs, down 0.2 percent from late New York trade.

The Swiss National Bank has been intervening in forex markets over the past year as part of its efforts to protect the Swiss economy, and traders are watching for indications of just how much the central bank will allow the currency to climb.

The euro fell 0.2 percent to $1.3475 after sliding as low as $1.3458, its lowest in three weeks and in sight of this year's low around $1.3430 struck earlier this month.

Against the yen, the euro dropped 0.2 percent to 121.89 yen. The dollar was little changed at 90.44 yen.

The New Zealand dollar dropped after data showed that the country's annual current account deficit narrowed in the fourth quarter, but the improvement was not as strong as expected.

But the kiwi later recovered to trade down just 0.1 percent at $0.7047.

A rally in U.S. stocks to 18-month highs kept investor appetite for risk intact and provided mild support to higher-yielding currencies such as the Australian and New Zealand dollars. (Editing by Chris Gallagher)

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