NS:WORLD FOREX: Euro Down As German Elections Spur Greece Concerns
-- Euro falls as German local elections add to concern over Greece issues
-- Exit polls suggest ruling party has lost support ahead of parliamentary vote on eurozone temporary bailout mechanism
-- Follows suspended talks among Greece, IMF, ECB representatives over new bailout funds
By Kosaku Narioka
Of DOW JONES NEWSWIRES
TOKYO -(Dow Jones)- The euro extended its falls Monday in Asia amid renewed concerns over the Greek debt crisis as an apparent slump in support for German Chancellor Angela Merkel's ruling party in local elections added to pressure on risk-sensitive units such as the common currency in the wake of dismal U.S. jobs data Friday.
Based on initial exit polls, rival parties gained fresh support in the elections Sunday, piling further pressure on Merkel at a time when she already faces criticism at home over her handling of the euro-zone debt crisis and Germany's slowing economy.
The development is seen as negative for the euro because the loss of regional influence comes as Merkel's party prepares for a much-anticipated vote in the German parliament at the end of the month on changes to the euro-zone's temporary bailout mechanism.
The news follows Friday's suspension of talks between the Greek government and representatives of the International Monetary Fund, European Central Bank and European Commission over new bailout funds. The talks were suspended amid disagreements over how to fill a government-deficit gap that once again appears to be veering off track.
"There is a growing view that the Greece is getting nowhere," said Daisaku Ueno, chief analyst at Gaitame.Com Research Institute.
The euro was also weighed down by deteriorating risk sentiment after the U.S. economy in August failed to add any jobs, and by diminishing expectations for further rate hikes by the European Central Bank, market participants said.
The euro was at $1.4167 as of 0450 GMT from $1.4205 late Friday in New York, according to EBS, and was at Y108.76 from Y109.12. The dollar was at Y76.77 from Y76.82. The ICE Dollar Index was at 74.868 from 74.706.
The euro could fall to $1.4000 later in the global day, some market participants said, but the common currency would find support there, near its 200-day moving average versus the greenback, which is now at $1.4011.
"I don't think the euro will keep falling as Asian sovereign wealth funds could step in to buy it on dips," a Japanese bank dealer said.
Interbank Foreign Exchange Rates At 0050 EST / 0450 GMT
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