Forexpros – The euro remained close to a two-month high against the U.S. dollar on Wednesday, as markets awaited the outcome of talks in Greece to discuss conditions being demanded by the country’s creditors in exchange for a second bailout.
EUR/USD hit 1.3289 during U.S. morning trade, the pair’s highest since December 12; the pair subsequently consolidated at 1.3273, easing up 0.11%.
The pair was likely to find support at 1.3088, Tuesday’s low and resistance at 1.3381, the high of December 12.
Following delays in negotiations, Greek Prime Minister Lucas Papademos was holding talks in Athens with the leaders of Greece’s three political parties, aimed at agreeing on new austerity measures being demanded in return for a EUR130 billion aid package.
The deeply unpopular measures include billions of euros in government spending reductions, as well as cuts to pensions and wages.
Athens is also in talks with private-sector creditors over a planned EUR100 billion debt swap deal, which is also a precondition for the new aid package.
European Union officials have said a final agreement the bailout much be approved by February 15, in order to avert a default when a EUR14.5 billion bond repayment comes due on March 20.
But optimism that a bailout deal for Greece will prevent a default was overshadowed by official data showing that German exports fell at their fastest rate in nearly three years in December.
The data sparked concerns that the euro zone’s largest economy may have contracted more than originally estimated in the fourth quarter of 2011.
Elsewhere, the Bank of France said earlier that its economy will not grow at all in the first quarter of this year.
The euro was also higher against the pound, with EUR/GBP adding 0.46% to hit 0.8389.
In the U.K., investors were looking ahead to the Bank of England’s policy decision on Thursday, amid expectations that policymakers will implement a further GBP50 billion of quantitative easing in order to shore up growth in the faltering U.K. economy.