Euro Strengthens to Two-Month High as Greece Signals Confidence in Bailout



The euro rose to two-month highs versus the dollar and yen after a Greek government official signaled confidence the currency bloc’s finance ministers will approve a second financing accord for the debt-strapped nation.

The common currency extended its gain against the yen to a third day after Greek politicians debated budget cuts needed to secure the bailout with a dispute remaining over pension cuts. The European Central Bank meets today to set monetary policy. The Dollar Index (DXY) touched the lowest in two months as Asian stocks erased drops, sapping demand for a haven.

“The market thinks they’ll patch together some sort of deal,” said Tim Kelleher, head of institutional foreign- exchange sales in Auckland at ASB Institutional, a unit of Commonwealth Bank of Australia, referring to Greece. “The market still appears to be very short euros as a speculative position, so that’s one of the reasons why it’s not going down.” A short position is a bet a currency will depreciate.