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The
euro, though held its ground and rose against the yen on relief
that there was progress in Greek bailout talks. Euro zone
finance ministers early on Wednesday gave a nod to releasing
10.3 billion euros ($11.48 billion) in new funds for Greece in
recognition of painful fiscal reforms pushed through by Prime
Minister Alexis Tsipras's leftist-led coalition
The dollar index was at 95.616 after rising as high as 95.661
earlier in the Asian session, its highest since late March. The
index has risen nearly 3 percent this month. The latest move
came after data showed new U.S. single-family home sales surged
to a more than eight-year peak in April and prices hit a record
high.
The euro was flat at $1.1142, holding above a 10-week low of
$1.1133 struck on Tuesday, with an upbeat German IFO survey also
underpinning sentiment.
The single currency was 0.3 percent higher against the yen at
122.80 as southern European government bonds rallied on the
Greek news.
"The Greek debt problem was not the biggest concern, but there
is relief it is out of the way and the euro is drawing some
support from that," said Niels Christensen, FX strategist at
Nordea. "The biggest focus in the currency market remains the
Fed and rate hike expectations."
While some profit-taking emerged after the dollar's recent
gains, many investors took a breather before data and events in
coming days, traders said.
The upbeat housing numbers backed the Fed's April policy meeting
minutes, released last week, which hinted it may raise rates
soon if the economy appeared strong enough. Still, not many are
convinced of a June rate hike, with markets pricing in only 38
percent chance of a move, according to CME's Fedwatch.
"I fear only one of the Fed heavy weights will be able to sway
market expectations notably, above all the chair, Janet Yellen.
Until then, the appreciation potential in dollar will remain
limited," said Thu Lan Nguyen, currency strategist at
Commerzbank.
Yellen is due to speak on Friday, which is also the concluding
day for the G7 summit being held in Japan. Once the G7 summit is
out of the way, markets will be focusing on whether Tokyo may be
looking to postpone a scheduled sales tax hike and implement
fiscal stimulus measures.
(Additional reporting by Lisa Twaronite; Editing by Mark
Heinrich)
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