WSJ:WORLD FOREX: Euro, Dollar Remain Strong As ECB Refinancing Op Eyed
-- Euro remains firm against dollar, yen as fears recede about a Greek default
-- The market is watching next week's European Central Bank's long term refinancing operation for reassurance on Europe's financial institutions
-- Dollar/yen stays strong, with market eyeing March 9 U.S. jobs report
By Alexander Martin
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The euro remained firm against the dollar and the yen during Asian trading Friday, as receding fears of a Greek default buoyed the common currency, and the market looked toward next week's long term refinancing operation by the European Central Bank for further cues.
The euro breached its overnight high and looks set to tread higher, supported by Thursday's stronger-than-expected German IFO indicator of business confidence and optimism toward the Greek debt restructuring deal.
The dollar also remained firm against the yen, plying the area not far off Wednesday's seven-month high of Y80.40.
As of 0450 GMT, the euro was at $1.3373 from $1.3370 late Thursday in New York, according to trading platform EBS. The common currency was at Y107.37 from Y106.94. The dollar was at Y80.30, up from Y80.00.
Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo, said the euro could be further supported if banks tap the European Central Bank for lesser loans next Wednesday than the EUR489 billion borrowed at the first operation in December.
"A lower figure will give a sense of reassurance that European financial institutions are holding up" without requiring too much funding, he said. A larger figure may support emerging currencies such as the Australian dollar and the New Zealand dollar while weakening the euro, which could be used for carry trades, he said.
The dollar, meanwhile, continued to ride its momentum against the yen, backed by improving U.S. economic figures, the Bank Of Japan's recent surprise monetary easing and Japanese trade deficits.
Daisaku Ueno, forex strategist at UBS in Tokyo, said the dollar/yen will soon be looking for new cues as its recent upward momentum runs its course.
"It seems like the pair is looking for its next direction," he said, adding that the U.S February employment report scheduled for release March 9 will likely be the next big indicator for the pair.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 78.676, from 78.645.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
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