FOREX-Euro slips to six-week low after Greece approves bailout plan

Thu Jul 16, 2015 4:21am EDT
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* Euro hits six-week low versus the dollar

* Dollar buoyed as Yellen stays on message about future Fed hike

* Kiwi tumbles to 6-year lows after soft inflation data

By Patrick Graham

LONDON, July 16 (Reuters) - There was no silver lining for the euro on Thursday after Greece voted through austerity demanded in return for another bailout, as improved interest rate differentials drove the dollar higher across the board.

The New Zealand dollar sank to a six-year low after weak inflation data cemented expectations for a cut in its official rates next week, while the Canadian dollar remained on the defensive after a cut there on Wednesday.

The euro did inch up briefly after the Greek vote but the absence of any greater reaction also seemed to signal a lack of faith that the bailout deal on the table will fix anything, that Athens will stick to its terms and, increasingly, that any of it will matter very much to the rest of the euro zone.

More importantly, perhaps, the spread between short-term dollar and euro interest rates has risen again as expectations of a rise in official U.S. borrowing costs this year solidify.

By 0844 the euro was 0.4 percent weaker at $1.0903, its lowest in six weeks.   Continued...