Euro slips on stubborn Greece concerns
LONDON: The euro fell against the dollar on Friday as investors remained concerned about the Greek debt crisis and its potential effects on the eurozone economy, analysts said.
In London morning deals, the euro slid to 1.4398 dollars, from 1.4501 late in New York on Thursday, after earlier falling as low as 1.4378.
Against the Japanese unit, the dollar decreased to 90.72 yen from 91.23 yen late on Thursday.
The euro was bogged down after European Central Bank governor Jean-Claude Trichet warned Thursday that an economic recovery in the common currency zone was "subject to uncertainty" due to Greece's debt woes.
The comments came after the bank kept its main refinance rate unchanged at a record low of 1.0 percent.
"Greece was once again the dominating subject on the markets, in particular as ECB president Jean-Claude Trichet had to answer numerous questions on the issue during the ECB press conference," said Antje Praefcke at Commerzbank.
"He was able to do that in a manner that avoided notable euro/dollar losses -- thus achieving the best possible outcome."
Trichet said Thursday that suggestions that Greece might resign or be expelled from the 16-nation eurozone because of its soaring deficit and debt reflected an "absurd hypothesis."
He noted however that Greece and several other eurozone members had "a lot of hard work to do."
Greece unveiled crisis plans on Thursday to put its fiscal house in order and to restore international credibility, especially among its eurozone partners, in the management of its struggling economy.
Praefcke added: "It will be decisive for euro/dollar in the near future whether EU members or institutions seriously consider a bailout of Greece.
"Such a bailout would constitute a point of no return as it would go at least against the spirit of the euro stability pact evoking the danger of a fiscal policy moral hazard."
Greece, which is mired in recession, has a public spending deficit that rose to 12.7 percent of output last year, far above the 3.0 percent ceiling permitted to countries sharing the euro.
It is also saddled with a debt constituting 113 percent of gross domestic product (GDP).
Meanwhile, lacklustre US economic data cooled speculation that the US Federal Reserve might raise interest rates sooner than previously expected.
Traders scaled back their expectations of Fed rate hikes following disappointing retail sales and jobless claims data in the United States.
In London on Friday, the euro was changing hands at 1.4398 dollars against 1.4501 dollars late on Thursday, 130.62 yen (132.27), 0.8835 pounds (0.8878) and 1.4773 Swiss francs (1.4770).
The dollar stood at 90.72 yen (91.23) and 1.0260 Swiss francs (1.0182).
The pound was at 1.6296 dollars (1.6332).
On the London Bullion Market, the price of gold eased to 1,134.82 dollars an ounce from 1,138.25 dollars on Thursday.