* Euro hits 10-month low vs dlr below $1.3300
* China's PBOC says Greek debt crisis just the beginning
* Dollar/yen weighed down by sales from Japan exporters
* Some see Fed liquidity unwinding steps behind US yield move
By Satomi Noguchi
TOKYO, March 25 (Reuters) - The dollar rose to a 10-month
high against the euro and a basket of currencies on Thursday as
comments from a China central banker fuelled concerns about debt
levels in the euro zone, just as an EU summit to help heavily
indebted Greece is set to start.
Zhu Min, deputy governor of the People's Bank of China, said
the Greek debt crisis was just the beginning, prompting
short-term players to sell the euro and triggering stop-loss
orders at $1.3300 [
The remarks exacerbated concerns about debt levels in some
euro zone nations, coming on the heels of a credit rating
downgrade on Portugal and amid doubts that EU policy makers will
quickly craft a rescue package for Greece at the two-day summit.
[ID:nWLB0770] []
"Short-term speculators are probably all short on the euro,
but there are long-term investors who are patiently holding
back," said Kazuyuki Takami, senior manager of foreign exchange
trading at the Bank of Tokyo-Mitsubishi UFJ.
"But depending on the developments, those long-term investors
could also start dumping the currency, taking it further and
further down," he said.
The euro's weakness was compounded by the strength in the
greenback, which has been underpinned by views that the Federal
Reserve will further unwind liquidity measures, prompting rises
in U.S. yields, traders said.
Athens faces the prospect of refinancing some 20 billion euro
of debt in April and May at twice the rate Germany has to pay to
borrow.
The euro fell as far as $1.3283 on trading platform EBS, its
lowest since May 2009, before recovering to $1.3303 <EUR=>, down
0.1 percent from late New York trade on Wednesday.
Against the Swiss franc, the single currency was down 0.2
percent at 1.4259 francs <EURCHF=R>, hovering slightly above a
record low of around 1.4230 francs hit on EBS on Wednesday.
The dollar index, a gauge of the greenback's performance
against six other major currencies, rose as high as 82.062, a
10-month high before trading at 81.954 <=USD> <.DXY>, up 0.1
percent on the day.
Although the U.S. currency dipped against the yen, hurt by
sales from Japanese exporters above 92 yen and others taking
profits on its sharp rise the previous day, it retained most of
its gains, they said.
"The cost of dollar borrowing is gradually rising and various
kinds of dollar procurement have been actively undertaken
recently," said Kazuyuki Kato, treasury department manager at
Mizuho Trust & Banking.
A jump in U.S. Treasury yields on Wednesday supported the
greenback, while three-month dollar LIBOR rates <USD3MFSR=> fixed
at 0.28491 percent on that day, more than 4 basis points above
comparable yen LIBOR <JPY3MFSR=>, after having been nearly flat
earlier this month. [] []
The dollar slipped 0.2 percent to 92.12 yen <JPY=>, but pared
earlier losses. On Wednesday, it rose to a 10-week high of 92.42
yen on trading platform EBS.
It broke above its 200-day moving average, which is around
91.55, and there will likely be some more room for the dollar to
climb against the yen, a trader at a Japanese securities firm
said.
The Federal Reserve is expected to wrap up purchases of
mortgage-related assets by the end of March, but the central bank
has said it would monitor the economic outlook and financial
developments to see if more support is necessary. []
Among higher-yielding currencies, the Australian dollar
bounced after a top Reserve Bank of Australia official said that
further interest rate rises there were likely. []
The Aussie was up 0.2 percent to $0.9101 <AUD=D4> and it rose
as high as 84.00 yen <AUDJPY=R>, its highest since late January.
(Additional reporting by Kaori Kaneko and Aiko Hayashi; Editing
by Edwina Gibbs)
