The euro rose broadly today as traders covered short positions, relieved that Greece was able to raise funds from the market following a pledge of financial support from European partners if Athens needs it.
Extending its rally from last week, the euro hit its strongest versus the yen in nearly two months, while edging up to a one-week high against the dollar as traders locked in profits on short euro positions, which peaked last week.
Analysts said the euro was boosted by position squaring before the end of the month - which wraps up the first quarter for many global firms and the Japanese financial year.
At the same time, Greece's sale of €5 billion of seven-year debt yesterday eased some risk aversion following a chill in overall demand for risky assets for much of this year due in part to concerns about Greece's massive debts.
The euro has gained roughly 1.5 per cent versus the dollar since Friday, when EU leaders announced plans for a safety net for Greece, which would include the International Monetary Fund, should Athens need assistance in servicing its debts.
By 7.48am, the euro had edged up 0.2 per cent to $1.3508, after hitting $1.3539 in early European trade according to Reuters data, its strongest since March 23rd.
However market participants said the euro's upside was capped around $1.35, where as much as €1 billion worth of options were expected to expire later in the day.
Against the yen, the euro climbed half a percent on the day to 125.44 yen, its strongest since early February.
Traders have crept back into the euro after bets the single currency will fall hit a record high last week, according to the latest data from the Commodities Futures Trading Commission.
Reuters