Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

FOREX-Euro surrenders gains vs dollar after Slovak vote

Published 10/11/2011, 05:04 PM
Updated 10/11/2011, 05:08 PM
EUR/JPY
-

* Slovak parliament rejects EFSF expansion

* EU, IMF, ECB, Greece wrap up review for 8 bln euro aid

* U.S. Senate to vote on China trade bill later Tuesday (Updates prices)

By Wanfeng Zhou

NEW YORK, Oct 11 (Reuters) - The euro traded little changed against the dollar on Tuesday, surrendering early gains after the Slovak Parliament rejected the plan to expand the euro zone rescue fund.

The Slovak government also lost a confidence vote but the European Financial Stability Facility package is expected to go through in a later re-vote because the outgoing prime minister planned to ask for help from the opposition.

Moves in the euro were limited, however, as the result had been anticipated after a junior party in the coalition said it would abstain.

"What it does do though is it throws markets into limbo now for the next couple of days until the Slovakians organize a new government and ultimately get the EFSF up for a second vote, when it's expected to pass," said Brian Dolan. chief strategist at Forex.com in Bedminster, New Jersey.

The euro last traded little changed at $1.3637, above an earlier low of $1.3565 set on trading platform EBS. In the near term, traders said the euro will likely consolidate in a range of $1.3550 to $1.37.

Against the yen, the euro was also flat at 104.54 .

The euro earlier rose against the dollar after U.S. stocks rebounded from early lows. The common currency's recent move has correlated closely with investor appetite for stocks and other risky assets.

A lasting euro rally was still unlikely, however, given a lack of the details of European policymakers' plans to recapitalize banks amid speculation Greece would eventually default on its debt.

The EU, International Monetary Fund and European Central Bank -- known as the troika -- said an eight-billion-euro loan tranche to Greece should be paid in early November but they warned Athens it had made only patchy progress in meeting the terms of a bailout agreed in May last year. [ID:nL5E7LB1JM]

"I am still skeptical that a comprehensive plan will be really in place by early November," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The key risk is that Greece is insolvent and will likely default on its debt." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Euro zone debt crisis graphics http://r.reuters.com/hyb65p

Calculator on banks' needs http://r.reuters.com/jyw62s

Yuan's rise vs US dollar http://link.reuters.com/rac44s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CHINA BILL

The greenback held steady at 76.66 yen , not far from a record low near 75.94 yen set in August. Against a basket of currencies, the dollar index rose 0.2 percent to 77.665 <.DXY>.

Also on Tuesday, the U.S. Senate is set to vote on a trade bill aimed at pressuring China to allow its yuan currency to appreciate further against the dollar.

Ahead of the Senate vote on the China trade bill, spot yuan closed at 6.3750 against the dollar, slightly weaker than 6.3486 at the close on Monday, when it strengthened 0.59 percent in its biggest daily rise since its 2.1 percent revaluation in July 2005.

The Chinese currency has appreciated 30.3 percent since then, including the revaluation.

Washington and Beijing have exchanged heated remarks over this latest bill but analysts see little chance of passage. (Additional reporting by Richard Leong; Editing by James Dalgleish)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.