Investing.com -- EUR/USD rose modestly on Wednesday to reverse mild losses one session earlier, as Germany reportedly neared a breakthrough with Greece on an incremental cash-for-reforms package that could help the cash-strapped nation avoid default on its sovereign debt.
The euro gained 0.0045 or 0.40% to move to 1.1324 on Wednesday against its American counterpart. EUR/USD traded between 1.1264 and 1.1386 on a choppy day of trading. The pair remained over 1.10 for the seventh consecutive session.
EUR/USD likely gained support at 1.0913, the low from June 2 and was met with resistance at 1.1450, the high from May 17.
In Brussels, Bloomberg reported that Germany chancellor Angela Merkel is prepared to offer an incremental deal to Greece if the cash-strapped nation is committed to accepting some of the reforms proposed by its creditors last week. The reforms include: a higher imposition of taxes, the issuance of less generous retirement benefits to municipal workers and increased state asset sales, according to reports. Merkel could be satisfied with a deal if Greece commits to at least one of the aforementioned reforms.
In exchange for the austerity measures, the plan reportedly calls for Greece to receive a small disbursement of the remaining €7.2 billion of a €240 billion bailout. The staggered aid package could be enough for Greece to meet a €1.5 billion obligation to the International Monetary Fund at the end of the month.
It is unknown if the disbursement will be enough to cover separate obligations to the IMF and the European Central Bank later this summer. Greece owes a €0.5 billion loan repayment to the IMF in mid-July, followed by a €3.5 billion payment to the ECB a week later. At the start of August, Greece owes a modest €0.2 billion repayment to the IMF before another payment of more than €3.0 billion is due to the ECB at the end of the month. Greece prime minister Alexis Tsipras is scheduled to meet with France president Francois Hollande and Merkel on Wednesday evening. The developments could ease fears that Greece could leave the European Union and possibly default on its sovereign debt.
"Grexit is off the table, we want to keep Greece in the euro zone," Spain's economic minister Luis de Guindos told Reuters.
Reports also surfaced that Greece could be willing to another concession by accepting its creditors' proposal of a 1% primary budget surplus on its GDP this year. In a 47-page proposal submitted last week, Greece appeared willing to only accept a primary surplus of 0.6%. Also on Wednesday, Netherlands finance minister Jeroen Dijsselbloem said it is possible a deal could be struck when the euro group of finance ministers meets next on June 18.
Before then, more progress could be made on Thursday when Tsipras is scheduled to meet with EU Commission president Jean-Claude Juncker.
Elsewhere, the improved economic outlook in Europe continued to extend the ongoing bond rout in the euro zone. Yields on German 10-Year bunds hit 1% for the first time since September, while yields on Italian 10-Year bonds reached their highest level since November. The sell-off spilled over to the U.S. where yields on 10-Year Treasuries approached 2.5% before falling back to 2.486, a gain of five basis points.
Meanwhile, the U.S. Dollar Index touched a three-week low at 94.31 before rebounding slightly to 94.59. The U.S. Dollar Index, measures the strength of the greenback, versus a basket of six other major currencies.