* Euro falls as Eurostat shows bigger Greece budget deficit
* Greek CDS at record high, Greek/German yield spread widens
* Analyst says market pricing in 'end game' for Greece
(Adds quote, updates prices)
By Naomi Tajitsu
LONDON, April 22 (Reuters) - The euro fell broadly on
Thursday after data showing Greece's budget deficit was worse
than previously thought highlighted the market's hunger for a
speedy resolution to its debt crisis.
Eurostat revised Greece's 2009 budget deficit to 13.6
percent of gross domestic product from 12.7 percent. The figures
pushed the euro to a session low of $1.3356. []
The Greek/German 10-year government bond yield spread
<GR10YT=TWEB><DE10YT=TWEB> expanded to 562 basis points after
the figures to its widest in 12 years as the cost of insuring
Greek debt from default surged to record highs.
"The Eurostat figures show that the starting point for
Greece's debt consolidation is further away than initially
thought," said Chris Turner, head of currency strategy at ING in
London.
"The market is getting close to pricing in an end game for
the Greece story, which is the acquisition of an aid package."
Greece started talks with European and IMF officials on
Wednesday on a potential aid deal and a three-year economic
policy plan but it could take several weeks before Athens can
tap the funds if needed. []
Greece needs to raise about 10 billion euros by end-May to
refinance debt, make interest payments and fund the deficit.
For a Reuters poll on the risk of Greek default, click
[]
By 1110 GMT, the euro <EUR=> had fallen 0.4 percent on the
day to a session low of $1.3331, off the day's peak of $1.3421
and pushing through options-related support seen around $1.3350.
Against the pound, the euro <EURGBP=D4> fell as low as 86.57
pence, its weakest since late January. Sterling was supported by
recent UK data suggesting Britain's economic outlook has
brightened. First-quarter GDP numbers are due on Friday.
Data on Thursday showed UK retail sales came in at a
lower-than-expected 0.4 percent on month in March, but
February's figures were revised higher.
Analysts said the euro may take another thumping when Greece
activates the aid package and formally asks for help.
Overall, they said debt worries involving euro zone
countries would continue to haunt the euro.
"The euro could briefly benefit from a relief rally
following the possible activation, but the back and forth on the
issue shows the problem will not go away immediately and it
might in fact dampen any relief bounce," UBS said in a note.
YEN GAINS
The yen benefited as investors pared exposure to riskier
assets, and on media reports the Bank of Japan may upgrade its
inflation and growth forecasts in a semi-annual report next
week. []
The Japanese currency recovered from brief selling after
ratings agency Fitch said Japan's government debt would rise
further, putting downwards pressure on sovereign credit and
ratings over the medium term. []
The dollar <JPY=> was little changed at 93.09 yen, pulling
away from the day's high of 93.34 yen. Offers were seen above
93.40 yen, traders said.
U.S. President Barack Obama was due to speak in New York
later on Thursday and expected to call on the financial industry
to support regulatory reform.
Speaking ahead of Group of 20 and International Monetary
Fund meetings kicking off in Washington later in the day,
central bank chiefs of India and Brazil backed U.S. calls for a
stronger Chinese currency. []
(Additional reporting by Tamawa Desai, editing by Nigel
Stephenson)
