Euro edges down as investors eye week-end Greek talks

The dollar lost some ground on the yen but edged up against the euro on Friday, as Greece’s continued struggle to reach a funding deal with lenders kept the common currency on tenterhooks.

The euro stood at $1.1191, down about 0.1 per cent after drifting in a razor-thin $1.1179-$1.1208 range, even narrower than its slim $1.1153-$1.1228 range on Thursday. It was down about 1.4 per cent for the week.

Against the yen, the common currency skidded about 0.4 per cent on the day to 138.05 yen, down about 0.9 per cent for the week but holding above a nearly one-month low of 137.66 hit on Thursday.

“The euro itself is still struggling. The downward pressure is intact,’’ said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign-exchange research firm.

“Rangebound trading will continue, until the next news trigger on Greece,’’ he said.

Greece debt deal

Euro zone finance ministers had ended their third meeting in a week without agreement on Thursday, setting up a last-ditch effort on Saturday to try to avert the prospect of Greece defaulting on a repayment to the International Monetary Fund due on Tuesday.

That could trigger a bank run and capital controls, possibly setting Athens on a path out of the euro zone. A so-called Greek exit would create considerable market turbulence, the head of the Swiss National Bank warned, adding that the bank would fight a rush to buy already overvalued Swiss francs.

US consumer spending

With Greece hogging the headlines once again, US data was relegated to the background. Figures on Thursday showed US consumer spending recorded its largest increase in nearly six years in May, providing further evidence that economic growth was accelerating in the second quarter.

The dollar index last was at 95.233, slightly higher on the day.

But against its Japanese counterpart, the greenback was a touch softer at 123.37, down about 0.2 per cent and off this week's high of 124.38 yen but still up about 0.5 percent for the week.

Japan householding spending

Data released early on Friday showed Japan’s household spending in May rose for the first time in more than a year. Other data showed a robust jobs market fuelled hopes that companies will begin lifting wages needed to spark inflation towards the Bank of Japan’s ambitious 2 per cent goal, though core consumer prices rose just 0.1 per cent in the year to May.

The New Zealand dollar slipped about 0.2 per cent on the day to $0.6890 as investors perceived a dovish spin on a central bank report.

The Reserve Bank of New Zealand said in its statement of intent for 2015 to 2018 that it would keep investigating the use of macroprudential tools to control the housing market.

That could leave the central bank room to cut interest rates further if needed, without the fear of fuelling a house price bubble, traders said.

The kiwi slid as far as $0.6864 on the report, from a session high of $0.6916.

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