Euro slips, bonds rally on Greek upset

Sun Jul 5, 2015 6:53pm EDT
 
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By Wayne Cole

SYDNEY (Reuters) - The euro fell sharply in Asia on Monday after polls suggested the Greeks had overwhelmingly rejected austerity measures demanded in return for bailout money, putting in doubt its continued place in the single currency.

In a typical "risk-off" reaction top-rated sovereign bonds were well bid while U.S. equity futures dropped around 1.4 percent ESc1. Oil prices also took a spill with Brent crude falling 67 cents to $59.65 a barrel LCOc1.

While the price action was choppy, dealers emphasized that markets were orderly with no signs of financial strain and expectations were high that the European Central Bank would step in early with a pledge of extra liquidity.

The Japanese government said it was ready to respond as needed in markets and was in close touch with other nations.

The euro was down 0.9 percent at $1.1012 EUR= but off an early low of $1.0967. It had initially dropped around 1.5 percent on the safe-haven yen only to find a big buy order waiting, which pared its losses to 134.53 EURJPY=.

Likewise, the dollar recouped its early drop to be only a touch softer at 122.34 yen JPY=. The dollar index added 0.3 percent to 96.434 .DXY.

The latest reports from Greece said around 60 percent of those voting in the referendum had backed the government and rejected the bailout conditions. [TOP/CEN]

Euro zone finance ministers will meet on Tuesday to prepare an emergency euro zone summit on Greece.   Continued...

 
Euro coins are seen in front of a displayed of Head of Apollo on 1.000 Drachma old Greece banknote in this photo illustration taken in Zenica, Bosnia and Herzegovina, June 30, 2015. REUTERS/Dado Ruvic