The euro held
steady on Wednesday, finding some support as investors held on to hopes
that Greece will find enough common ground with its euro zone partners
and avoid a chaotic exit from the currency union.
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The euro traded at $1.1405, staying above this week's low of $1.13195 hit on Monday.
Although Greece rejected a proposal to request a six-month extension of its international bailout on Monday, market players are betting that an agreement will be reached in the next couple of weeks.
A
source close to the government said Greece intends to ask on Wednesday
for an extension of a loan agreement with the euro zone.
The source drew a distinction between a loan agreement and the full bailout program, which the new government insists is dead.
Still, investors expect a compromise on the bailout program will be reached as failure to do so could lead to a disorderly Greek exit from the currency bloc.
Until the standoff over Greece's demands is resolved, markets will likely stay on edge, limiting any gains in the euro in the near term.
"There remains uncertainty on whether the bailout program will be extended," said Shin Kadota, chief FX strategist.
Against the yen, the euro stood at 135.87 yen, down 0.1 percent on the day but well above Tuesday's low of 133.96 yen.
The yen showed limited reaction when the Bank of Japan kept its monetary stimulus program unchanged, as expected.
The
dollar last traded at 119.15 yen, down 0.1 percent on the day but
little changed from levels seen ahead of the BOJ's policy decision.
The focus turned to a news conference led by BOJ Governor Haruhiko Kuroda later on Wednesday.
Heng Koon How, senior currency strategist for private banking and wealth management at Credit Suisse in Singapore, said Kuroda is unlikely to offer any strong hints about the possibility of adding to the BOJ's monetary stimulus in the near term.
"I think it's still premature, because he probably will need to wait for the Q1 data first before having a view on whether the BOJ the needs to expand policy," Heng said, adding that investors will be watching for any comments on the yen.
Japan economy minister Akira Amari said on Tuesday that neither excessive yen strength nor excessive yen weakness was desirable. If there is excessive yen weakness, that could deviate from Japan's economic fundamentals.
The prospect of a Fed rate hike by mid-year helped to push the dollar index to a 11-year high last month, and it has been consolidating since then.
The dollar index last stood at 94.085, little changed from late U.S. levels and off its January peak of 95.481.
Although Greece rejected a proposal to request a six-month extension of its international bailout on Monday, market players are betting that an agreement will be reached in the next couple of weeks.
The source drew a distinction between a loan agreement and the full bailout program, which the new government insists is dead.
Still, investors expect a compromise on the bailout program will be reached as failure to do so could lead to a disorderly Greek exit from the currency bloc.
Until the standoff over Greece's demands is resolved, markets will likely stay on edge, limiting any gains in the euro in the near term.
"There remains uncertainty on whether the bailout program will be extended," said Shin Kadota, chief FX strategist.
Against the yen, the euro stood at 135.87 yen, down 0.1 percent on the day but well above Tuesday's low of 133.96 yen.
The yen showed limited reaction when the Bank of Japan kept its monetary stimulus program unchanged, as expected.
The focus turned to a news conference led by BOJ Governor Haruhiko Kuroda later on Wednesday.
Heng Koon How, senior currency strategist for private banking and wealth management at Credit Suisse in Singapore, said Kuroda is unlikely to offer any strong hints about the possibility of adding to the BOJ's monetary stimulus in the near term.
"I think it's still premature, because he probably will need to wait for the Q1 data first before having a view on whether the BOJ the needs to expand policy," Heng said, adding that investors will be watching for any comments on the yen.
Japan economy minister Akira Amari said on Tuesday that neither excessive yen strength nor excessive yen weakness was desirable. If there is excessive yen weakness, that could deviate from Japan's economic fundamentals.
The prospect of a Fed rate hike by mid-year helped to push the dollar index to a 11-year high last month, and it has been consolidating since then.
The dollar index last stood at 94.085, little changed from late U.S. levels and off its January peak of 95.481.
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