Euro Strengthens On Greek Deal Hopes

The euro climbed against its key counterparts in European deals on Tuesday, as the Greek finance minister Yanis Varoufakis proposed a plan to restructure its debt load by swapping outstanding debt for new growth-linked bonds, easing fears of debt default.

Investors pinned hopes for an agreement on the Greek debt standoff after the country’s new anti-austerity finance minister ruled out accepting more bailout cash and proposed ending a standoff with its international creditors.

Varoufakis is touring Europe to gather support for a new agreement on Greek debt. He is expected to visit the European Central Bank on Wednesday.

The European markets are also up on hopes of Greek government reaching a debt deal with its international creditors soon.

In economic news, Eurozone producer prices declined at the fastest pace in five years during December, figures from Eurostat showed.

Producer prices fell 2.7 percent year-on-year in December, faster than 1.6 percent decline in the previous month. Economists had forecast a 2.5 percent fall for the month.

The euro advanced to a weekly high of 1.1398 per dollar, off early low of 1.1311. The next possible resistance for the single currency is seen around the 1.15 mark.

The single currency rose to a 4-day high of 133.79 against the yen from its previous low of 132.38. The euro may eye resistance near the 135.00 region.

Data from the Bank of Japan showed that Japan’s monetary base jumped 37.4 percent on year in January, coming in at 275.385 trillion yen.

That follows the 38.2 percent spike in December.

The euro recovered to 1.0537 against the franc and 0.7548 against the pound, from early lows of 1.0461 and 0.7524, respectively. The euro may find resistance around 1.20 against the franc and 0.775 against the pound.

Looking ahead, U.S. factory orders data for December is due shortly.

At 10:00 am ET, U.S. Federal Reserve Bank of St. Louis President James Bullard will deliver a speech on “U.S. and International Economies and Monetary Policy” before the 10th Annual Delaware Economic Forecast hosted by the University of Delaware.

Additionally, U.S. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota will deliver a speech on “Goal-Based Monetary Policy Report” before the Minnesota Bankers Association Conference at 11:45 am ET.

Published: 2015-02-03 14:30:00 UTC+00

Euro Strengthens On Greek Deal Hopes