The euro came back moderately higher Wednesday after reacting positively to the latest austerity measures in Greece and then relinquishing some of its gains.
The U.S. dollar recovered some strength against the euro after reports the leaders of Germany and Greece won't discuss aid for fiscally troubled Greece at a meeting Friday.
German Chancellor Angela Merkel said she planned to discuss Greece's austerity plans when she meets Greek Prime Minister George Papandreou in Berlin Friday, but a spokesman for Merkel said earlier Wednesday the two leaders would not discuss any aid package for Greece.
News that the Institute for Supply Managements non-manufacturing index for February in the U.S. rose to 53.0 in February from 50.5 in January, exceeding the expected 51.0, had little immediate impact on markets.
Wednesday morning, the euro was at $1.3654 from $1.3607 late Tuesday, according to EBS via CQG. The common currency was at Y121.10 from Y120.75. The dollar was at Y88.68 from Y88.75 and at CHF1.0716 from CHF1.0753. The UK pound was at $1.5041 from $1.4960.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.223 from 80.501.
The main focus of the session has been the announcement by Greek authorities of a range of austerity measures embracing spending cuts and tax increases, which includes a rise in value-added tax, a cut in salary bonuses and a freeze of state pensions. They are expected to raise EUR4.8 billion.
The euro eventually rose to a session high at $1.3675 in back-and-forth trading after the news, but retraced some of its gains.
"There isn't a lot of momentum," said Vassili Serebriakov, currency strategist at Wells Fargo Bank in New York.
"It's a little bit of a 'buy the rumor, sell the fact,' or at least 'buy the anticipation of the news and sell after the news,'" he said.
Serebriakov expects the greenback to trade between $1.3450 to $1.3700 in the near term.
"The dollar strength will stick around, and it's going to be difficult to see headway in euro/dollar above $1.37, certainly," said Stephen Gallo, head of market analyst at Schneider Foreign Exchange in London.
News that payroll giant ADP's private-sector jobs report showed losses of only 20,000 in the U.S. in February, stronger than the expected decline of 50,000, had little sustained impact on currency markets.
Analysts said the euro is still at risk because there is still no assurance the Greek measures will be fully implemented and because the package will contribute to slower growth in the euro zone as a whole.
"Even if this helps Greece, there's a fiscal cost to the rest of the region and the credibility of the euro project," said Steve Barrow, senior currency strategist with Standard Bank in London.
Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said talk in markets that the U.S. Justice Department may investigate hedge fund collusion may have favored some paring back of negative bets against the euro.
The common currency also wasn't helped by the latest purchasing managers' index for the region's service sector, which fell back more than expected to 51.8 last month from 52.5 in January. The market had only expected it to slip to 52.0.
The pound was also staging a small rally--pulling itself back over $1.50 after falling below that level Monday. Sterling buying was encouraged by the latest Nationwide consumer confidence index, which rose 6 points to 80, its highest level since January 2008.
Unlike the euro zone's services PMI, the UK's index was much higher than expected, rising to 58.4 last month from 54.5 in January. The market had forecast the index at only 55.5.
Wells' Fargo Serebriakov said the pound's rally doesn't suggest sustained strength. "It's really more of a correction from a very sharp move lower rather than a reversal of market bias at this point," he said.
The pound is struggling to break decisively above $1.50, suggesting the move reflects profit taking on earlier negative bets on the pound, he added.
Reports that Prudential may not be able to complete its $35 billion takeover of an American International Group unit in Asia because of a sharp fall in its share price also gave the pound some support. The announcement of the planned deal had initially knocked the pound lower because the transaction could have involved the sale of huge amounts of sterlings for dollars.
The U.S. dollar recovered some strength against the euro after reports the leaders of Germany and Greece won't discuss aid for fiscally troubled Greece at a meeting Friday.
German Chancellor Angela Merkel said she planned to discuss Greece's austerity plans when she meets Greek Prime Minister George Papandreou in Berlin Friday, but a spokesman for Merkel said earlier Wednesday the two leaders would not discuss any aid package for Greece.
News that the Institute for Supply Managements non-manufacturing index for February in the U.S. rose to 53.0 in February from 50.5 in January, exceeding the expected 51.0, had little immediate impact on markets.
Wednesday morning, the euro was at $1.3654 from $1.3607 late Tuesday, according to EBS via CQG. The common currency was at Y121.10 from Y120.75. The dollar was at Y88.68 from Y88.75 and at CHF1.0716 from CHF1.0753. The UK pound was at $1.5041 from $1.4960.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.223 from 80.501.
The main focus of the session has been the announcement by Greek authorities of a range of austerity measures embracing spending cuts and tax increases, which includes a rise in value-added tax, a cut in salary bonuses and a freeze of state pensions. They are expected to raise EUR4.8 billion.
The euro eventually rose to a session high at $1.3675 in back-and-forth trading after the news, but retraced some of its gains.
"There isn't a lot of momentum," said Vassili Serebriakov, currency strategist at Wells Fargo Bank in New York.
"It's a little bit of a 'buy the rumor, sell the fact,' or at least 'buy the anticipation of the news and sell after the news,'" he said.
Serebriakov expects the greenback to trade between $1.3450 to $1.3700 in the near term.
"The dollar strength will stick around, and it's going to be difficult to see headway in euro/dollar above $1.37, certainly," said Stephen Gallo, head of market analyst at Schneider Foreign Exchange in London.
News that payroll giant ADP's private-sector jobs report showed losses of only 20,000 in the U.S. in February, stronger than the expected decline of 50,000, had little sustained impact on currency markets.
Analysts said the euro is still at risk because there is still no assurance the Greek measures will be fully implemented and because the package will contribute to slower growth in the euro zone as a whole.
"Even if this helps Greece, there's a fiscal cost to the rest of the region and the credibility of the euro project," said Steve Barrow, senior currency strategist with Standard Bank in London.
Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said talk in markets that the U.S. Justice Department may investigate hedge fund collusion may have favored some paring back of negative bets against the euro.
The common currency also wasn't helped by the latest purchasing managers' index for the region's service sector, which fell back more than expected to 51.8 last month from 52.5 in January. The market had only expected it to slip to 52.0.
The pound was also staging a small rally--pulling itself back over $1.50 after falling below that level Monday. Sterling buying was encouraged by the latest Nationwide consumer confidence index, which rose 6 points to 80, its highest level since January 2008.
Unlike the euro zone's services PMI, the UK's index was much higher than expected, rising to 58.4 last month from 54.5 in January. The market had forecast the index at only 55.5.
Wells' Fargo Serebriakov said the pound's rally doesn't suggest sustained strength. "It's really more of a correction from a very sharp move lower rather than a reversal of market bias at this point," he said.
The pound is struggling to break decisively above $1.50, suggesting the move reflects profit taking on earlier negative bets on the pound, he added.
Reports that Prudential may not be able to complete its $35 billion takeover of an American International Group unit in Asia because of a sharp fall in its share price also gave the pound some support. The announcement of the planned deal had initially knocked the pound lower because the transaction could have involved the sale of huge amounts of sterlings for dollars.
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