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Euro gains as Greek talks commence

Monday, November 26 09:27:33

The euro hit a seven-month high against the yen and held near a one-month peak versus the dollar today, supported by hopes that Greece will finally secure more emergency loans to keep it afloat. Euro zone finance ministers meet on Monday for a third time in as many weeks to hammer out a deal to get international lenders to release aid to Greece in time for debt repayments due mid-December. Germany Chancellor Angela Merkel said she was confident a deal could be reached, while the French finance minister said an agreement was close.

The euro rose to as high as 107.135 yen on trading platform EBS, the single currency's strongest level since late April. It later trimmed its gains and last changed hands at 106.70 yen. Against the dollar, the euro eased 0.2 percent to $1.2954 , having hit a high of $1.2991 on Friday, the euro's highest level since late October. "There is optimism around in regards to the euro area's ability to achieve a deal on Greece," said Emma Lawson, senior currency strategist at the National Australia Bank, adding further upside in euro/dollar was likely.

Some analysts, however, cautioned that the euro could lose momentum even if international lenders agree on Monday to release the next tranche of aid to Greece. "It could be a case of buy-on-rumour, sell-on-fact. The euro has strong resistance just above $1.30," said Mitul Kotecha, global head of foreign exchange strategy for Credit Agricole in Hong Kong. ( C) Reuters