Euro weakens on Greece as emerging stocks, Spanish bonds decline
By Emma O?Brien & Nick Gentle
The euro weakened after Greece told creditors to lower demands that are holding up bailout funds. Emerging-market stocks fell as speculation grew the U.S. was moving closer to raising interest rates, while Poland?s zloty slid to a two-month low and Spanish markets dropped.
Europe?s shared currency declined 0.4 percent to $1.0972 at 10:35 a.m. in London. The MSCI Emerging Markets Index lost 0.6 percent. Poland?s zloty retreated after an opposition candidate won the presidency, while Spanish stocks and bonds fell as local elections showed support for parties seeking to overturn the political status quo. Chinese shares jumped to a seven-year high. The Stoxx Europe 600 Index and Standard & Poor?s 500 Index futures were little changed. The Bloomberg Dollar Spot Index rose for a second to a one-month high. Markets in the U.S., U.K. and Hong Kong were among those closed on Monday.
Greek Prime Minister Alexis Tsipras said over the weekend the country can?t accept crushing austerity, while Interior Minister Nikos Voutsis, who has no economic decision-making powers, went so far as to say Greece couldn?t and wouldn?t pay the International Monetary Fund in June without a deal. Federal Reserve Chair Janet Yellen said on Friday she expected to raise interest rates this year after a report showed core inflation climbed more than forecast in April.
?There is ongoing euro negativity in the light of the Greek comments about the June 5 payment, while markets consider the dollar in the light of the Yellen warnings on rates on Friday,? said Jeremy Stretch, the head of currency strategy at Canadian Imperial Bank of Commerce in London. ?It should be relatively quiet in view of the lack of data and market liquidity.?
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