Euro rebounds in Asia after Cyprus fears fall


AFP

TOKYO–The euro rebounded in Asian trade on Tuesday after plunging to multimonth lows on fears that a 10-billion-euro bailout deal for Cyprus could become a template for future regional rescue packages. There are also growing worries that Cyprus still faces possible panic when banks reopen, with lenders in other weak eurozone economies facing a similarly dire scenario. Nicosia reversed a decision to reopen some banks on Tuesday after world markets took fright at the implications of the island’s bailout, which calls for an unpopular levy on big bank deposits. The euro’s initial gains in Asia on Monday after the deal was announced were later erased when Eurogroup head Jeroen Dijsselbloem said the Cyprus model of penalizing bondholders, shareholders and uninsured deposit holders in bank failures could be applied elsewhere on the troubled continent. However, the embattled euro bought US$1.2866 and 121.21 yen in afternoon Tokyo trade, strengthening from US$1.2853 and 120.96 yen late Monday in New York, and well up from the US$1.2830 it hit in London, its lowest level since November. The dollar strengthened to 94.26 yen in Tokyo from 94.10 yen, as investors look to a Bank of Japan meeting next week. The dollar was mixed against other currencies Tuesday, weakening to 9,750 Indonesian rupiah from 9,755 rupiah a day earlier, to 1,105 South Korean won from 1,117 won, and to SG$1.2410 from SG$1.2494. The greenback strengthened to 29.36 Thai baht from 29.23 baht, to 40.95 Philippine pesos from 40.83 pesos, and to 54.33 Indian rupees from 54.28 rupees.

The Australian dollar firmed to US$1.0462 from US$1.0425 while the Chinese yuan fetched 15.16 yen against 15.25 yen.