Euro rises on Greek hopes

The euro clung to through-the-night gains in Asia today, having gone up on the hopes that Greece was nearing agreeing a second bailout package, says Reuters.

Meanwhile, improved risk appetite saw the yen go down across the board. The euro stood at $1.3132, after it recovered from a three-week trough of around $1.2973. Traders said that any positive signs coming from Greece could see the single currency rise back above $1.3300 and move towards the two-month peak of $1.2975 from 9 February.

Analysts from BNP Paribas said there is potential for more short-covering in the single currency into next week’s EU finance ministers meeting. They stated in a note that given the ongoing experience of missed deadlines and dashed hopes, they would predict that there remains sufficient scope for the short covering rally seen on Thursday to extend if the Greece deal is confirmed on Monday.

Hopes have increased that Greece has finally managed to secure its second bailout after Athens laid out the additional budget savings that its international lenders demanded. In a further indication of an emerging agreement, sources from the eurozone said that national central banks within the region would exchange Greek bonds holdings this weekend in the lead-up to a private sector debt agreement to ensure forced losses are avoided.

Against the yen, the single currency reached 103.82, a two-month high, before losing some ground to close at 103.60.