Forexpros – The euro rose against the dollar on Thursday with investors snapping up attractively-priced positions as the market eased up on days of selling fueled from escalating Greek political concerns.
In Asian trading on Thursday, EUR/USD was trading up 0.08% at 1.2937, up from a session low of 1.2926, and off from a high of 1.2940.
The pair was likely to test support at 1.2912, the low of May 9, and resistance at 1.3060, the high of May 7.
In Greece, the country’s traditional political parties New Democracy and PASOK failed to muster enough votes in recent parliamentary elections needed to form a coalition that would stick with austerity in exchange for continued access to rescue funding.
The leftist Syriza party is now trying to form a government, and concerns are growing the country won’t have a government in place by June, when a bailout tranche is due to flow into the country’s coffers.
Syriza opposes austerity measures tied to receiving rescue funding.
Talk that Greece is done with austerity and will likely abandon the euro has weakened the currency over the past three sessions, while Spain is back on the radar as well.
Talk grew in Europe earlier that Spain will demand its banks to set aside EUR35 billion to cushion the financial sector, which fanned fears Madrid will need a bailout as well.
France, meanwhile, has taken a turn away from austerity and towards growth and spending via electing socialist Francois Hollande as the country’s next president, which further pressured the euro down in recent sessions.
Bottom fishing, however, bolstered the unit in Asian trading on Thursday.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP up 0.03% at 0.8018 and EUR/JPY trading up 0.07% at 103.03.
Later Thursday, the U.S. will grab more of the spotlight.
The country will unveil official trade balance figures, followed by government reports on initial unemployment claims and import prices.
The country will also release government data on the federal budget balance and the Treasury currency report, while Federal Reserve Chairman Ben Bernanke is due to speak.
His comments will be closely watched for any clues to the future possible direction of monetary policy.
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