The USD fell against the euro Thursday following reports that some of Europe’s national central banks may be willing to swap their Greek debt holdings, and European leaders are on track to approve money aid to Greece next week.
The euro fell below $1.30 in European trading hours amid mounting concerns surrounding the fate of a Greek bailout package, but recovered after a trio of U.S. economic reports boosted investor confidence in the recovery and detracted from interest in the greenback’s relative safe-haven status. The euro rose to $1.3141, after falling as low as $1.2973 and from $1.3067 late Wednesday. The shared currency hasn’t closed under $1.30 since Jan. 25.
Traders pointed to rumors that while the European Union may not approve the entire second tranche of Greece’s bailout Monday, at least Athens would receive a bridge loan to get it through a debt payment next month and elections in April. Also boosting risk sentiment, media reports said national euro-zone central banks are exchanging their holdings of Greek government debt for new Greek bonds–which may tilt the needle in what private investors accept in a debt swap.
Among other currencies, the JPY yen weakened further, with the USD up to Y78.85 from Y78.39 Wednesday. The GBP turned up, buying $1.5804, from $1.5694.
EasyForexNews Research Team