Euro drops against dollar

In morning trade here, the European single currency dropped to 1.3206 dollars from 1.3259 dollars in New York late on Wednesday.

Against the Japanese currency, the dollar slipped to 83.92 yen from 84.03 yen on Wednesday.

Economics Affairs Commissioner Olli Rehn said on Thursday that EU finance ministers are ready to look favourably on extending the repayment period for Greece's 110-billion-euro (145-billion-dollar) bailout.

"The council of EU financial ministers is ready to look positively into the extension of the repayment period of the loan," Rehn said following a meeting in Athens with Greek Finance Minister George Papaconstantinou.

The possibility of the extension of the repayment of Greece's three-year loan, which had been scheduled to be repaid by 2015, was first mooted when the EU-IMF agreed last month an 85-billion-euro bailout for Ireland with a considerably longer repayment period.

IMF head Dominique Strauss Kahn has also called for extending the repayment period of Greece's rescue loans.

Analysts on financial markets have expressed concern that Greece would run into a period of great difficulty in meeting its rescue loan repayment obligations. This was a background factor in an upsurge of tension on eurozone bond markets recently.

"Peripheral stress has eased in the past few days," ING bank analyst Padhraic Garvey said in a note to clients on Thursday in reference to renewed interest in government bonds being issued by indebted eurozone nations.

"In fact we have seen some reasonable nibbling of peripheral paper from the buyside, including buying in Ireland, Portugal and Italy.

"Also some decent interest in Belgian paper, which we now see as quite cheap in the wake of recent weeks of underperformance. Not big flows, but at least ones that have a more positive tint than that of previous weeks," he added.

In London on Thursday, the euro changed hands at 1.3206 dollars against 1.3259 dollars late in New York on Wednesday, at 110.83 yen (111.43), 0.8375 pounds (0.8387) and 1.3040 Swiss francs (1.3080).

The dollar stood at 83.92 yen (84.03) and 0.9873 Swiss francs (0.9861).

The pound was at 1.5765 dollars (1.5803).

On the London Bullion Market, the price of gold fell to 1,383.15 dollars an ounce from 1,385.50 dollars late on Wednesday.

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