The euro gained against most counterparts in early Asian trading after being lifted by news that the Greek parliament approved austerity measures required to received a 130 billion euro bailout package and avert a default. The vote passed by 199 against 74 but final approval must still be passed by the Eurogroup at a meeting of euro zone finance ministers on Wednesday.
EURUSD opened in Asia at 1.3204 and climbed up to a high of 1.3258 just after the successful Greek parliament vote. Euro also gained against the pound and yen. EURGBP bounced following the successful Greek vote, opening at 0.8372 and trading up to 0.8394 before the European session open. EURJPY opened at 102.43 and rose as the Greek vote got underway, hitting 102.92 before steadying.
The focus now turns to the European finance ministers meeting on Wednesday. While the euro got a lift following the Greek parliament approval on austerity measures, the currency still remains vulnerable ahead of the Eurogroup meeting as it is uncertain how they will react. Even if the austerity measures are approved by the euro-zone finance ministers, there still remains the question of whether or not they can actually be implemented.
As a result of upbeat risk sentiment, the safe haven US dollar weakened and other risk currencies and commodities got a lift. The dollar index which measures the greenback’s performance against six other major currencies, fell to 78.773, versus 79.107 in North American trade late Friday.
A weaker dollar tends to support buying in gold and other dollar-denominated commodities, as it makes them cheaper to holders of other currencies. Gold rose to an Asian session high of $1,729.77 from a session low of $1,719.91. Also crude oil rose during Asian trading hours, closing back in on the $100-a-barrel level.
AUDUSD was lifted by the news from Greece and AUDUSD rose to 1.0748 from 1.0688.
Yen weakened against the dollar after a report that Japan’s economy shrank an annualized 2.3 percent in the fourth quarter from the previous three months. This was the fourth drop in five quarters and worse than the forecast 1.6 percent decline, as exports and manufacturing were affected by a strong yen and flooding in Thailand, a key manufacturing center for many Japanese companies. USDJPY rose to 77.76 from 77.57 but then yen recovered.