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FOREX-Euro zone debt deal hopes push euro higher

Thu Feb 16, 2012 12:41pm EST

  • * Greek debt swap deal could be done in days
  • * U.S. jobless claims, housing starts beat expectations
  • * Dollar hits highest vs yen since October

By Luciana Lopez

NEW YORK, Feb 16 (Reuters) – The euro reversed losses to rise against the U.S. dollar on Thursday, as hopes that a Greek bond swap deal could be within reach boosted global investor sentiment as well as the appeal of higher-risk assets. The single currency traded as high as $1.3120 against the
dollar, after having spent almost all of Thursday’s session in the red. That was well past the psychological support level at $1.30, also a reported options barrier.

“We’re getting reports that the ECB (European Central Bank) is moving forward with its (Greek) bond swap, so the possibility of some concrete progress is reinvigorating risk appetite and pushing up the euro,” said Kathy Lien, director of research at GFT Forex in Jersey City. “We’re finally walking in the right direction.”

If a deal for a Greek debt swap is completed by Monday and followed by details about a second bailout, she said, the euro could push back above  1.33, but buying in the interim will be “cautious.”

FOREX-Euro zone debt deal hopes push euro higher