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Euro dips in Asia after ECB easing measures

A 50-cent euro coin bearing the image of Pope Benedict XVI is pictured in Rome /AFP

A 50-cent euro coin bearing the image of Pope Benedict XVI is pictured in Rome /AFP

TOKYO, June 6 – The euro dipped a touch in Asia on Friday after the European Central Bank (ECB) launched unprecedented easing measures to bolster fragile eurozone growth and prevent deflation.

The single currency fetched $1.3657 in Tokyo afternoon trade, down from $1.3662 in New York but still up from $1.3600 in Tokyo earlier Thursday.

The euro weakened to 139.76 yen from 139.93 yen, but was also stronger than 139.43 yen in Tokyo prior to the announcement.

The dollar edged down to 102.33 yen from 102.41 yen.

The ECB said after a meeting Thursday it would cut its deposit rate to negative territory. This means banks will be charged for leaving funds at the ECB in the hope they might lend it on to businesses and consumers instead.

It also slashed its lending rate to a record low of 0.15 percent from 0.25 percent and said hundreds of billions of euros would be made available in cheap loans to banks as long as they lent more to the private sector.

Bank chief Mario Draghi said after the meeting that policymakers would also be open to possible asset purchases, or quantitative easing, similar to that undertaken in the United States and Japan.

“The ECB managed to surprise relative to high expectations by delivering a full package of easing measures,” Credit Agricole said.

“Any further deterioration in the inflation outlook would likely trigger outright asset purchases.”

The dollar was lower against other Asia Pacific currencies.

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It weakened to 1,019.75 South Korean won from 1,021.48 won, to 43.66 Philippine pesos from 43.82 pesos, to Sg$1.2527 from Sg$1.2573, and to 59.22 Indian rupees from 59.34 rupees.

The US unit also weakened to 11,839 Indonesian rupiah from 11,889 rupiah, to 32.56 Thai baht from 32.68 baht, and to Tw$30.02 against Tw$30.03.

The Australian dollar rose to 93.28 US cents from 92.83 cents while the Chinese yuan was at 16.34 yen against 16.39 yen.

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