Euro firms on Athens debt hopes

The euro rose today and was supported by increasing hopes for the Greeks to agree a debt restructuring deal capable of helping the country steer clear of a disorderly default.

As reported by Reuters, the dollar extended recent losses versus the Japanese yen and hit its lowest rate in three months after the US Federal Reserve stated last week that it is most likely going to keep interest rates close to zero until late 2014 at the earliest. The euro zone's currency got a lift shortly after Prime Minister Lucas Papademos told how negotiators currently in his native's capital Athens had made "significant progress" towards striking a restructuring deal, with the ambition of reaching a definitive agreement before the end of the week.

The euro rose 0.3 per cent to $1.3180 and edged back toward $1.3235, a six-week high that was hit last week. The euro will face resistance at this level and also close to $1.3244, the retracement of 38.2 per cent that the currency had during its October to January slide.

Rob Ryan, BNP Parisbas' FX strategist in Singapore, commented that any break of the mentioned $1.3244 retracement level will see more significant short coverings. A rise in regional equities lent support to the euro, according to traders that added there has also been talk of dollar-selling in relation to end-of-the-month portfolio adjustments.