TOKYO: The euro rose in Asian trade Thursday, a day after crisis-hit Greece announced sweeping new measures to slash its massive public debt, dealers said.
Markets were also waiting for clues on the monetary policy outlook in Europe when the European Central Bank and Bank of England both hold meetings later in the day.
The euro firmed to 1.3707 dollars in Tokyo morning trade from 1.3691 dollars in New York late Wednesday and to 121.19 yen from 121.15. The dollar edged down to 88.43 yen from 88.46.
The single European currency had risen overnight thanks to the additional Greek fiscal reform plans, Royal Bank of Scotland strategist Akane Uchida told Dow Jones Newswires.
Athens announced an increase in sales, tobacco and alcohol taxes and cut public-sector holiday allowances to save 4.8 billion euros (6.5 billion dollars), equal to about two percent of gross domestic product.
Pensions in the public and private sector were also frozen.
But Uchida said the euro's rise will likely be capped as Europe's economic outlook remains gloomier than that of the United States, which on Wednesday reported a surprise rise in the manufacturing activity index for February.
The Federal Reserve's Beige Book survey on economic conditions also revealed that activity "continued to expand," underlining a gradual recovery in the world's largest economy.
Investors had their eyes on the ECB and BoE meetings. They are expected to keep interest rates unchanged, but post-meeting statements will be examined for any clues on a timeline on withdrawing their extraordinary measures.
"There will be particular interest in the ECB's announcement on changes in liquidity provision and the BoE's signals on the potential for further expansion in quantitative easing," said Credit Agricole CIB analyst Mitul Kotecha.
But "a dovish signal from the BoE will deliver sterling a blow, leaving the pound vulnerable to a drop back below 1.50 dollars," he warned. The British pound was changing hands at 1.5090 dollars in Tokyo trade.
Central banks in Indonesia and Malaysia are also expected to hold meetings later although interest rates are expected to remain unchanged.
