Forex - Euro pushes higher on Greece deal hopes

Published 01/23/2012, 05:54 AM
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Investing.com - The euro pushed higher against most of its major counterparts on Monday, but the single currency remained vulnerable amid uncertainty over the outcome of talks aimed at restructuring Greek debt in order to avert a default.

During European late morning trade, the euro was higher against the U.S. dollar, with EUR/USD up 0.26% to hit 1.2966.

Finance ministers from the European Union were to meet later in the day to discuss the terms of a proposed debt restructuring package for Greece.

The restructuring agreement is a precondition for Athens to receive its next tranche of bailout funds in order to avoid a default when an EUR14.4 billion bond redemption comes due on March 20.

On Sunday, Greece’s creditors said they had reached their maximum offer for a voluntary debt swop and said it was now up to the EU and the International Monetary Fund to agree on whether they can accept the deal.

The shared currency was also higher against the pound and the safe haven yen, with EUR/GBP adding 0.31% to hit 0.8328 and EUR/JPY easing up 0.16% to hit 99.76.

The outlook for the pound was clouded by ongoing speculation that the Bank of England may announce fresh monetary easing measures as soon as next month, to stimulate growth in the faltering U.K. economy.

Elsewhere, the euro was steady against the Swiss franc, with EUR/CHF dipping 0.05% to hit 1.2078.

But the euro continued to struggle close to recent record lows against the Australian and New Zealand dollars, with EUR/AUD slipping 0.12% to hit 1.2315 and EUR/NZD shedding 0.23% to hit 1.6000.

Earlier in the day, the Aussie shrugged off official data showing that producer price inflation rose less-than-expected in the fourth quarter, ticking up 0.3% after a 0.6% rise the previous quarter.

Analysts had expected Australian PPI to increase 0.4% in the fourth quarter.

The euro was almost unchanged against the Canadian dollar, with EUR/CAD inching up 0.07% to hit 1.3110.

Also Monday, the Bank of Spain said the country’s economy will fall back into recession this year with a contraction of 1.5%, but added that it expects the economy to make a modest rebound in 2013 with gross domestic product growth of 0.2%.


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