WSJ:WORLD FOREX: Dollar Powers Higher On Renewed Euro-Zone Fears
-- Euro hit by lack of progress by EU ministers on debt crisis
-- South Korea, Indonesia intervene to defend their currencies
-- Eyes on Fed, IMF, BRICs meetings this week
By Martin Vaughan and Gaurav Raghuvanshi
Of DOW JONES NEWSWIRES
SINGAPORE -(Dow Jones)- The dollar rose against the euro and other risk-sensitive currencies Monday, as the failure of European officials to show progress on containing the euro-zone debt crisis sapped risk appetite.
Authorities in South Korea and Indonesia were suspected of selling dollars to slow their currencies' slide, as risk aversion fueled outflows from emerging markets. The Korean won was at its lowest in almost six months, while the Singapore dollar also tumbled to a five-month low.
With Tokyo markets closed for a national holiday and little on the Asian data calendar, market players latched on to disappointing news from weekend meetings of European finance ministers in Wroclaw, Poland.
"It continues to sound like there is little coordination among the EU leaders to resolve the crisis," said BNZ currency strategist Mike Burrowes in Wellington.
Ministers warned they may withhold the next tranche of Greek aid, EUR8 billion due in October, if Athens fails to take decisive action. Greek Prime Minister George Papandreou canceled a U.S. trip to run crisis meetings, continuing Monday, but Finance Minister Evangelos Venizelos said Athens is being "threatened and humiliated" by the demands of the EU, IMF and ECB.
A weekend setback for German Chancellor Angela Merkel, as her government's coalition partner, the Free Democrats, got crushed in Berlin elections, also fed into euro weakness and added to the general caution in currency markets.
Dealers will watch closely a Tuesday-Wednesday meeting of the U.S. Federal Reserve for any signs of further easing, which could eat into recent dollar gains and support risk.
"Overall, the week is starting nervously and will likely shape up to be another risk-off week unless the Fed provides a much-needed boost to confidence," Mitul Kotecha, the head of global FX strategy at Credit Agricole said in a note.
The start of meetings later this week of the International Monetary Fund, the Group of Seven and the Group of 20 will also be watched closely for any efforts to support the euro-zone--particularly from BRICS emerging powers: Brazil, Russia, India, China and South Africa.
The euro was at $1.3673 at 0631 GMT, down from $1.3802 late Friday in New York. The yen was stable in low volumes with Tokyo traders absent. The dollar was at Y76.87 in Asia, little changed from Y76.82 late Friday.
The pound was at $1.5699 after sliding to an eight-month low $1.5685 from Friday's $1.5790. The Australian dollar was at $1.0231, from $1.0362 in New York Friday.
Interbank Foreign Exchange Rates At 01:50 EST / 0550 GMT
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