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The single currency rose to $1.1282, up 0.4
percent on the day, moving further away from an 11-year low of
$1.1098 hit early on Monday after it became clear that Greece
had voted in a new anti-bailout government.
Investors are hopeful that the left-wing Syriza party leader,
Alexis Tsipras, is willing to negotiate, easing concern that a
confrontation with its international creditors could lead Greece
to leave the euro.
The euro had risen to as high as $1.13455 <EUR=> earlier in the
day, but gave back some of those gains in a volatile European
trading session.
Last week was the worst for the euro in almost 4-1/2 years, with
the single currency shedding over 3 percent, as the European
Central Bank unleashed a 1.1 trillion euro quantitative easing
programme to shore up the flailing euro zone economy.
"The fundamentals are well in place for a weaker euro but it's
come a long way and I think people are just fearful that with
the ECB event there may be a consolidation period where
corrective forces come into play," said Ian Gunner, portfolio
manager of the Altana Hard Currency Fund in London.
The dollar edged down across the board <.DXY> before a two-day
Fed policy meeting that starts later on Tuesday. Investors were
betting the Fed could respond to a recent string of rate cuts
and easing measures by other major central banks by pushing back
expectations of when U.S. rates will rise.
"In the next 24-48 hours it's really about whether the Fed
stages a bit of a fight-back or not," said Adam Myers, European
head of European FX strategy at Credit Agricole in London.
"If they stay silent, the market will think ... that's a green
light (for U.S rate rises) so let's sell euro/dollar," he said,
and the euro could break through $1.15 this week.
Switzerland's franc fell against the euro, at one point tumbling
over 2 percent to 1.03845 <EURCHF=EBS>, a level not seen since
the minutes that followed the Swiss National Bank's removal of
its cap on the currency, with traders speculating that the SNB
was intervening to weaken the currency.
The franc last stood at 1.01820 against the euro, down 0.2
percent on the day.
(Editing by Larry King and David Evans)
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