Euro hit a new two -week high against the dollar early into the European trading session on Friday, peaking at 1.2984 as optimism continues to buoy the single currency on signs that Greece may be close to a debt-swap deal with its creditors. Sterling also rose to its highest since January 6 against the dollar, peaking at 1.5500.
After a sharp rise on Thursday following successful Spanish and French debt auctions, and also positive news that the IMF is planning to boost its lending resources, EURUSD is probably now due for a corrective move and may stall until further information from the Greek debt talks.
Greece and its private bondholders resume debt swap talks on Friday as the cash-strapped Greek government is under pressure to reach an agreement by Monday. Greece needs to secure its next 14.5 billion euros instalment of aid in March based on the bailout deal in order to be able to pay bond redemptions due in March.
The Greek Finance Minister, Evangelos Venizelos was quite optimistic after Thursday’s round of talks in Athens with Charles Dallara, head of the Institute of International Finance (IIF) representing bondholders.
“The atmosphere was good, progress was made and we will continue tomorrow afternoon,” commented Venizelos.
The IIF issued a statement echoing the minister, and called the discussions “productive”.