June 30, 2015 / 11:43 PM / 4 years ago

Euro burdened by Greece, uncertainty high

SYDNEY (Reuters) - The euro remained on the defensive in Asia on Wednesday as Greece became the first developed economy to default on a loan with the IMF, setting the scene for another day of uneasy action in markets.

A man gestures as he looks at boards displaying stock prices at the Australian Securities Exchange in central Sydney, Australia June 29, 2015. REUTERS/David Gray

Still, it surprised no one when the International Monetary Fund confirmed Greece had missed a payment on its debt, perhaps taking it a step closer to an exit from the euro.

The IMF said Greece had asked for a last-minute repayment extension earlier on Tuesday, which the Fund’s board would consider “in due course.”

European finance ministers will confer later on Wednesday over Greek Prime Minister Alexis Tsipras’ request for a new two-year loan to pay debts that amount to nearly 30 billion euros.

Investors, however, clung to hopes that a deal will be done at some stage to keep Greece in the single currency.

“There is so much uncertainty, speculation, truth and partial truth that many markets are in stasis; waiting to see which way this goes,” said Emma Lawson, senior currency strategist at National Australia Bank.

The euro was just a shade lower in early trade at $1.1128 EUR=, having dipped 0.8 percent on Tuesday. Activity was light across the currency market with the U.S. dollar index drifting up to 95.529 from Tuesday's low of 94.847.

Against the yen, the dollar stood at 122.42 JPY=, near a five-week low of 121.93 plumbed overnight.

Japanese stock futures JNc1 pointed to a steady start for the Nikkei .N225 as it stabilizes after Monday's steep fall.

On Wall Street, the Dow .DJI had edged up 0.13 percent on Tuesday, while the S&P 500 .SPX gained 0.27 percent and the Nasdaq .IXIC 0.57 percent. June was the first negative month in three for the major indexes, with the S&P 500 down for the first quarter in ten.

The pan-European FTSEurofirst 300 .FTEU3 index lost 1.3 percent on Tuesday and was off 4.7 percent for the quarter.

Investors were again warily eying markets in China where there were tentative signs that Beijing’s efforts to stem the recent selloff were starting to work.

The combination of cuts in interest rates, allowing local government pension funds buy stocks for the first time and talk of behind-the-scenes “window guidance” to institutional investors, triggered a sharp rebound on Tuesday.

The CSI300 index .CSI300 rallied 6.7 percent, while the Shanghai Composite .SSEC jumped 5.6 percent.

Yet volatility has been so high that few were confident that the market had truly found its footing.

In commodities, oil had bounced back on Tuesday to end the quarter with hefty gains. Brent LCOc1 was quoted at $63.59 a barrel and U.S. crude CLc1 at $59.47.

Editing by Shri Navaratnam

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