FOREX-Euro edges up, EU signals assistance for Greece

* Euro little changed vs dlr, supported on news of Greek aid

* EU’s Van Rompuy: Reached a deal to help Greece

* Investors await details, EU summit start delayed by snow

(Adds comment, details, updates throughout)

By Naomi Tajitsu

LONDON, Feb 11 (BestGrowthStock) – The euro inched up on Thursday,
supported after European officials signalled they had agreed to
help Greece tackle its sovereign debts.

EU President Herman Van Rompuy said several key euro zone
officials had reached a deal to help Greece as a meeting of the
group’s 27 leaders, economic advisers and other officials got
underway in Brussels. [ID:nBRU010643]

Concern over how Athens will service its debt has hammered
the euro — it is down nearly 10 percent versus the dollar since
late 2009 — but it has found its footing this week as
expectations of an aid package have firmed.

“It looks like some sort of agreement has been reached …
but the euro’s response has been cautious as it depends on the
details to come,” said Ian Stannard, currency strategist at BNP
Paribas in London.

He said that a plan which only offers help specifically to
Greece would do little to help the euro, given the view that
other euro zone nations, including Portugal and Spain, are also
suffering from fiscal woes.

A Spanish EU source on Thursday said that financial support
for Greece should involve help from the euro zone and the
European Union as a whole, and a deal is likely to be finalised
by Tuesday. [ID:nLDE61A14E]

Heavy snow in Brussels delayed the start of the EU meeting.
A news conference is scheduled at its close.

By 1226 GMT, the euro (EUR=: ) was little changed on the day
at $1.3715, pulling further away from an 8 1/2-month low of
$1.3585 hit on trading platform EBS last week.

It hit the day’s high of $1.3801 but gains were capped at
that level, the 50 percent retracement of its rise to a November
2009 peak of $1.5145 from its March 2009 low of $1.2457.

The euro rose fell 0.4 percent against the yen to 122.93 yen
(EURJPY=R: ), but stayed above a one-year low of 120.70 yen hit
last week.

The euro has been whipped around in volatile trade this week
due to swirling speculation about the extent of support for
Greece, while analysts said traders were holding off from taking
big positions in the euro before the meeting.

Analysts said the euro was supported by tighter yield
spreads between Greek government bonds and their German
counterparts — considered the safest in the euro zone — on
optimism for an rescue plan for Greece.

For a graphic of the euro/dollar rate and Greek bond spread,
click on

Some analysts said there was room for a dramatic move by the
EU, which may even push the euro as high as $1.40.

“European authorities look to have been backed into a corner
to such an extent that they really do need to deliver something,
either a concrete plan or a strongly worded statement,” said Tom
Levinson, currency strategist at ING in London.

But he and other analysts said it would be difficult for the
single currency to hold gains, given the expected challenges of
implementing any sort of conditional assistance, and the view
that support for Greece would not solve all Europe’s problems.


The Australian dollar climbed more than 1.5 percent against
the dollar (AUD=D4: ) and the yen (AUDJPY=R: ), buoyed by a
bigger-than-expected rise in Australian employment in January
while the jobless rate hit an 11-month low. [ID:nSGE6190O9]

The Aussie dollar later extended its gains after an
unexpected slowdown in Chinese consumer inflation in January
soothed some concerns about the need for quick monetary
tightening by Chinese authorities. [ID:nTOE61706J]

The jump in the Aussie sparked a broad slide in the
lower-yielding yen and the dollar, which slipped slightly
against a currency basket to 79.987 (.DXY: ).

The dollar slipped 0.4 percent to 89.65 yen (JPY=: ).

Investing Basics

(Additional reporting by Tamawa Desai, editing by Nigel
Stephenson; Editing by Andy Bruce)

FOREX-Euro edges up, EU signals assistance for Greece