Euro recovers in New York

The euro rallied from a 16-month low against the dollar on Monday as market participants pared bearish bets on the single currency ahead of key European events this week although investors remained overwhelmingly negative due to sovereign debt concerns.
With euro net short positions at a record according to recent data from the Commodity Futures Trading Commission, the currency was susceptible to short-covering. But gains were contained as German Chancellor Angela Merkel reignited fears of a Greek default.
Merkel said it would not be possible to pay out the next aid tranche to Greece without rapid progress on its second rescue package, including the voluntary restructuring of Greek debt held by its private creditors.
"We were down a lot last week and with extreme short positioning in the euro, we're having a bounce-back and this is not due to any change in market view," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. The Swiss franc traded slightly higher against the euro after news that Swiss National Bank Chairman Philipp Hildebrand resigned in the wake of a scandal over a controversial currency trade made by his wife just weeks before he set a cap on the country's soaring currency. The concern was that with Hildebrand's resignation the SNB would be hard pressed to keep its peg against the euro, which could send the Swiss franc rising again.
In late afternoon New York trade, the euro was 0.4 percent higher versus the dollar at $1.27720 after hitting its lowest level since September 2010 at $1.26660 on trading platform EBS in thin Asian trade. Tokyo markets were closed for a public holiday.
Against the yen, the euro earlier hit an 11-year low of 97.280 yen Versus the Swiss franc, the euro was down 0.2 percent at 1.21250 francs. The dollar was down 0.2 percent against the yen at 76.827 yen, staying above a two-month low of 76.30 yen hit last week. The dollar eased from a 16-month high against a currency basket of 81.47 in Asia to trade 0.4 percent lower at 80.960.