Euro Strengthens From Lows as Germany Signals Compromise on Greek Crisis

The euro rose from a record low versus the Swiss franc as German Chancellor Angela Merkel said yesterday she would work with the European Central Bank on a debt plan for Greece.

Europe’s shared currency reversed its losses against the Swiss currency after Merkel retreated from demands that bondholders shoulder a “substantial” share of a Greek rescue, easing concern the region’s sovereign debt problems will worsen. Currencies of commodity exporting countries dropped this week as raw material prices slumped by the most in six weeks. The dollar gained against the euro before a Federal Reserve policy meeting next week.

“The focus for the market is the situation transpiring in Europe and how much risk is in the system,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto. “We are moving very quickly from one side of the boat to the other in terms of euro and it’s highlighting how much uncertainty there is.”

The euro rose 0.4 percent to 1.2142 francs, from 1.2098 June 10, and reached a record 1.19466. It weakened 0.3 percent to $1.4306, from $1.4347 last week. The shared currency fell 0.6 percent to 114.52 yen, from 115.24.

The dollar dropped 0.3 percent to 80.05 yen, from 80.32, a fourth straight week loss.