FOREX NEWS – Euro boosted by PMIs; counters Greek setback

Euro zone service sector PMI eases recession fears

Euro rises to near 3week high versus dollar, 4week high versus yen

Negotiations over Greek debt stall but hope for deal still alive

LONDON, Jan 24 The euro hit a near threeweek peak in volatile trade versus the dollar on Tuesday as a survey of the euro zone service sector topped forecasts and eased fears of a recession, though markets were edgy as talks to avert a messy Greek default stalled.

Surveys showed the euro zone may yet escape recession thanks to a surprise upturn in the service sector which offset ongoing contraction in manufacturing this month, briefly pushing the euro to the day’s highs.

“Germany’s recent ZEW survey was better than expected and now its PMI is also better which is lifting the overall PMI survey for the euro zone,” said Jane Foley, senior currency strategist at Rabobank.

“The market has been positioned for a downturn in Germany and maybe it has got too pessimistic on that front for now,” she added.

The common currency rose to its highest in nearly threeweeks versus the dollar of $1.3063 on trading platform EBS, before falling back to $1.3010, down 0.1 percent for the day.

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Mid-Day Report: Euro Recovers as Banks Agree to Rollerover Greek Debts

Euro recovers mildly today on news that representatives of some of the world’s largest banks from Germany, Holland, Belgium and France are discussing the way to rollover Greek debt maturing in the next three years. The roller over would form part of the second bailout package for Greece. According to Citigroup’s estimation, European banks hold more than EUR 17b bonds maturing by end of 2013. Meanwhile, under recent discussions between French Banking Federation and the French Treasury, French lenders would reinvest around 70% of Greek bonds That would greatly help EU from achieve it’s goal of rolling over at least EUR 30b of Greek bonds.

Nevertheless, recovery in Euro is weak so far. Uncertainties in the Greece situation is still in traders’ mind and is weighing on the common currency. The parliamentary approval of the new austerity measure later this week is expected by most, but the outcome is far from being certain.

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