Euro, stocks fall as fears of Greek default worsen
The euro slipped again this morning, with markets still largely unconvinced that Greece can dodge a default without political stability in Athens, keeping equity and commodity prices in a near-term downtrend.
Greece, whose prime minister is struggling to form a coalition government to push through unpopular austerity reforms, has become a focal point for investors looking for signals on whether to shed more risky assets and take defensive positions over the next few months.
Efforts by Olli Rehn, the European Union's top economic official to soothe markets overnight with expectations that the EU and International Monetary Fund will disburse a €12 billion loan in early July to Greece faded by the Asian session. The euro slipped fell back under US$1.42, Japan's Nikkei stock index was flat and oil prices slid back to red.
After a steady feed of negative headlines on Greece, investors were cautious ahead of a cabinet reshuffle in Athens later today.
The euro fell 0.2 percent to around US$1.4175. Traders will look for the euro to retest Thursday's low around US$1.4070 later in the day and will probably add to short positions if the currency gets near the lows.
Brent oil futures edged down 0.2 percent to US$113.85 a barrel, well off the six-week high reached on Wednesday of US$121.47.