SINGAPORE (Reuters) - The euro dipped on Friday but held on to the bulk of the previous day's gains after Greece moved closer to securing fresh funds needed to avoid a messy debt default.
The single currency eased 0.1 percent to $1.3267 after rallying about 1 percent on Thursday, its losses limited after Greece successfully closed its bond swap offer to private creditors.
"The euro has reacted positively to the removal of near-term anxiety (over Greece)," said a trader for a major Japanese bank in Singapore, adding that the ECB's comments on inflation the previous day were also lending the single currency support.
The ECB left interest rates unchanged at 1 percent on Thursday but gave a surprise warning on inflation, suggesting further policy easing was unlikely.
The yen dipped to a 9-½ month low versus the dollar of 81.899 yen on trading platform EBS at one point, pressured by yen-selling by Japanese importers and stop-loss selling, traders said.
The positive news on Greece was another factor that weighed on the yen, a safe haven currency that tends to come under pressure when investors' risk tolerance increases.
The dollar last stood at 81.80 yen, up 0.3 percent from late U.S. trade on Thursday.
Commodity currencies were steady to firmer with the Australian dollar holding flat at $1.0644 after having risen around 0.6 percent on Thursday, while the New Zealand dollar rose 0.2 percent to $0.8263.
With Greece's debt swap headed for success, analysts said they expected investors' appetite for risky assets to hold firm in the near term.
Such positive risk sentiment can weigh on funding currencies including the dollar and the yen, while supporting currencies leveraged to global growth like the Australian dollar.
To be sure, the exact take-up of Greece's debt swap was unknown and it was not yet clear whether Greece could avoid activating collective action clauses (CAC), which would enforce the debt exchange on recalcitrant holdouts.
If they are, that could trigger payouts on credit default swaps (CDS) that some investors hold on Greece's bonds.
Rob Ryan, FX strategist for BNP Paribas in Singapore, said the take-up for Greece's debt swap may not be high enough for Greece to avoid activating the enforcement clauses, but added that market players were likely prepared for that possibility.
"We think that they're not going to have the 90 plus percent that they want and that they will have to activate the CAC," Ryan said.
"That's what we assume is going to happen, and in fact there's an argument now that says that if it's not triggered, there's going to be worries about who bought CDS as insurance and now finds that the insurance is useless," he said.
"So at this stage, it may be less damaging to trigger the CACs and therefore the credit default (swaps)," Ryan said.
Preliminary results of Greece's bond swap offer are expected to be announced officially at 0600 GMT, before a conference call with euro zone finance ministers in the afternoon.
U.S. jobs data due late on Friday will also be closely watched, especially after the Wall Street Journal reported earlier in the week that Federal Reserve officials were considering sterilised quantitative easing to further help the economic recovery.
An outcome that bolsters such expectations could be the dollar's undoing.
"Our long-term view is still that the EUR/USD will be higher and the relative hawkishness of comments from ECB President Mario Draghi is a reminder that at its heart, the ECB 'wants' to normalise policy while Ben Bernanke 'wants' to buy more protection against disaster," said Kit Juckes, strategist at Societe Generale.
