The euro reached a two-month high against the dollar and the yen after Greek political leaders said they had reached an agreement on austerity measures needed to obtain a bailout.
The 17-nation currency strengthened against all but one of its most-traded counterparts after European Central Bank President Mario Draghi said it would lower the collateral requirements to access the next three-year loan auction later this month. The yen sank against higher-yielding counterparts as implied volatility for Group of Seven currencies fell to an 11- month low.
“The euro’s up on a combination of Greece and what the ECB has done in terms of reducing the collateral requirements and boosting expectations for the LTRO, which is supportive of risk appetite,” Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co., said referring to the ECB’s long-term refinancing operation. “The market has been very short euros and most of these shorts are getting squeezed out.” A short is a bet an asset will fall.
The euro gained 0.3 percent to $1.3293 at 11:29 a.m. in New York after rising to $1.3322, the strongest since Dec. 12. The common currency gained 0.9 percent to 103.06 yen after reaching 103.13 yen, the highest since Dec. 12. The yen dropped 0.7 percent to 77.55 per dollar.
The 17-nation currency strengthened against all but one of its most-traded counterparts after European Central Bank President Mario Draghi said it would lower the collateral requirements to access the next three-year loan auction later this month. The yen sank against higher-yielding counterparts as implied volatility for Group of Seven currencies fell to an 11- month low.
“The euro’s up on a combination of Greece and what the ECB has done in terms of reducing the collateral requirements and boosting expectations for the LTRO, which is supportive of risk appetite,” Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co., said referring to the ECB’s long-term refinancing operation. “The market has been very short euros and most of these shorts are getting squeezed out.” A short is a bet an asset will fall.
The euro gained 0.3 percent to $1.3293 at 11:29 a.m. in New York after rising to $1.3322, the strongest since Dec. 12. The common currency gained 0.9 percent to 103.06 yen after reaching 103.13 yen, the highest since Dec. 12. The yen dropped 0.7 percent to 77.55 per dollar.
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