Tokyo - The euro ticked up against the dollar on Friday on news of a plan to end Ukraine’s 10-month war, hopes that Greece will hammer out a debt overhaul with its European creditors and weak US retail sales data.
In Tokyo the euro bought $1.1427, up from 1.1406 in New York, while the greenback also was at 118.59 yen from 118.97 yen, and sharply down from 120.27 yen in Tokyo earlier on Thursday.
The single currency also fetched 135.46 yen compared with 135.70 yen.
Investors confidence got a boost on Thursday on the announcement that Ukraine, Russia, France and Germany had reached a deal to end the conflict between Kiev and pro-Moscow rebels.
While all sides remain cautious, the deal lifts a shadow that has loomed over markets for almost a year and has battered the Russian and Ukrainian economies.
Investors are now monitoring movements in Brussels, where Greece's new Prime Minister Alexis Tsipras is trying to convince other eurozone leaders to renegotiate terms of the country's austerity-laden bailout programme.
With talks due Friday, markets are hoping a deal can be reached before the end of the month, when Greece's bailout is due to expire. Failure to agree an extension would see it default and likely crash out of the eurozone.
“Calmer news on Ukraine is being be regarded as supportive, as is hope of a deal for Greece,” Greg Gibbs, head of Asia-Pacific markets strategy at Royal Bank of Scotland Group in Singapore, told Bloomberg News.
“The euro is reacting a lot to news on Greece mostly because it is vulnerable to short-covering on significant net short positions in the market.” A short position is a bet that an asset's price will fall.
The dollar also took a hit after the US Commerce Department on Thursday said retail sales slipped for the second straight month in January, pulled down by falling gasoline prices.
The figures cast doubt on the pace of US growth, which has been one of the few bright spots in the global economy, as the Federal Reserve eyes a mid-year interest rate hike.
“If we start to see some chinks in that armour and some data point to the fact that US may not be weathering that storm quite as well as expected, then I think certainly the dollar becomes more vulnerable,” said Omer Esiner, chief market analyst at currency brokerage Commonwealth Foreign Exchange.
Reports that Bank of Japan policymakers see further stimulus measures as counterproductive also helped support the yen.
The dollar was lower against key Asia-Pacific currencies.
The Australian dollar rebounded to 77.84 US cents from 76.50 cents after the previous day's fall on weak jobs data.
The dollar slipped to 62.15 Indian rupees from 62.44 rupees, to Tw$31.36 from Tw$31.60 and to 32.59 Thai baht from 32.72 baht.
The greenback also fell to 1,096.50 South Korean won from 1,109.14 won, to 12,762.60 Indonesian rupiah from 12,850.10 rupiah, to Sg$1.3544 from Sg$1.3629, and to 44.25 Philippine pesos from 44.42 pesos.
The Chinese yuan fell to 18.98 yen from 19.25 yen.
AFP