Euro down on Greece referendum shock as G20 meets

SINGAPORE, Nov 3, 2011 (AFP) - The euro retreated against the dollar in Asian trade Thursday as Greece faced European ire at a Group of 20 meeting over its decision to hold a referendum on its eurozone rescue deal, analysts said.

The euro fell to $1.3675 against the greenback in morning Asian trade from $1.3746 in late US trade Wednesday. The European currency also suffered against the yen, buying 106.75 yen as compared with 107.28 overnight.

The US dollar was unchanged against the Japanese currency at 78.06 yen.

Japanese financial markets were closed Thursday for a holiday.

Simon Teo, a senior currency dealer at Phillip Futures in Singapore, said Tuesday's referendum call from Greek Prime Minister George Papandreou had only worsened the euro's woes.

"Definitely, I think it's more on the weakening of the euro that's causing this drop, because we see that Greece actually called for this referendum which is very unexpected," he told AFP.

European nations are angry that the Greek referendum, possibly slated for December 4, risks blowing up the eurozone's debt rescue pact hammered out barely a week ago.

France and Germany issued Greece with an ultimatum on the eve of Thursday's G20 summit that Athens would not get "one more cent" from the European Union and International Monetary Fund unless Athens accepts the bailout deal.

With equity markets around the world also tanking, the dollar gained from the ructions as investors fled to what is considered a safe-haven currency, Teo said.

"Of course all these problems in Europe are linked to all the other markets, so definitely when there's a problem with assets like stocks and other things, investors will also run to the US dollar, to hold cash first," he said.

Heading into the G20 summit in the French resort of Cannes, Teo cautioned that markets would remain turbulent in the near term.

"My personal feel is that there will be a lot of volatility because a lot will depend on what news comes next."

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