Euro Gets Fresh Help on Greek Hopes

By: Barbara Zigah

Investors hoped remain firmly pinned on a resolution today to the Greek bailout issue, which has helped to buoy the Euro and other commodity-linked currencies. As reported at 10:35 (am) JST in Tokyo the Euro was trading against the U.S. Dollar at $1.3213, a gain of 0.6% but off the intra-session high of $1.3238. One analyst expects that a short-covering rally is likely, as and when that the Greek deal is finally confirmed. The Australian Dollar was trading against the greenback at $1.0779 but had earlier been as high at $1.0794; currency strategists say that if the AUD/USD pair break through $1.0845, the February 8th peak, it could re-test $1.1081, a 29-year high.

The Australian Dollar also received a big boost from China, which cut its reserve requirements on Saturday, a move had generally been expected but was nonetheless welcome. Analysts expect that given recent comments made by the Chinese premier and the central bank head, that China will quickly move to additional easing to spur the globe’s second largest economy.

Meanwhile, the safe haven Japanese yen was under renewed pressure following last week’s surprise move by the Bank of Japan. The U.S. Dollar surged against the Japanese currency, trading at one point at 79.89 Yen before retreating to 79.57 Yen.