Forexpros – The euro rose against the dollar on Tuesday, as optimism grew that enough private creditors appeared set to accept Greek restructuring terms, while stronger-than-expected eurozone retail sales bolstered the currency as well.
In Asian trading on Tuesday, EUR/USD hit 1.3222, up 0.03%, gaining from a session low of 1.3212 and off from a high of 1.3226.
The pair was likely to test support at 1.3160, Monday’s low, and resistance at 1.3333, Friday’s high.
Greece and a group of its private creditors have agreed to terms to restructure the country’s debt, a requirement for Athens to tap a recently approved EUR130 billion bailout fund.
However, a March 8 deadline looms for those creditors to formally agree to the EUR106 billion restructuring, and concerns have arisen that negotiators working on behalf of the private lenders might not have convinced everyone to accept a haircut.
Those fears waned in Asian trading Tuesday.
Greece has set a 75% participation rate in order to proceed with the swap, and appeared good to go early in the session.
Private investors are set to forgive Greece 53.5% of their principal and swap their remaining holdings for new Greek bonds and notes from the European Financial Stability Facility, a eurozone resuce fund.
The foreign exchange market, meanwhile, welcomed another shot of optimism when news broke that retail sales across the eurozone rose by a seasonally adjusted 0.3% in January, beating out forecasts for a 0.1% decline.
In the U.S., the news was positive as well.
The Institute for Supply Management said its non-manufacturing purchasing managers’ index rose to 57.3 in February from 56.8 in January, beating out forecasts the index to come in at 56.1.
Meanwhile, U.S. factory orders fell by a seasonally adjusted 1.0% in January, compared to expectations for a 1.3% slide.
Optimism that Greece is close to completing a step towards extinguishing the debt crisis held sway and sent the euro climbing and the dollar falling.
The euro was down against both the pound and the yen, with EUR/GBP trading down 0.01% at 0.8329 and EUR/JPY down 0.05% at 107.74.
Later Tuesday, the U.K. is to publish industry data on retail sales, an important indicator of consumer spending.
Elsewhere, the eurozone is to publish revised data on fourth quarter GDP.
Forexpros
