Euro rises, yen slips in Asia

The euro hit a fresh two-month high versus the dollar on Wednesday, supported by hopes that Greece may soon agree to austerity steps needed to secure a second bailout and avoid a disorderly default. The single currency also hit a seven-week peak against the yen, its rise gaining steam due to stop-loss buying.
The yen retreated broadly on the crosses, with traders saying the technical outlook for cross/yen pairs had improved after their recent breach of some technical resistance levels. The euro surged 0.5 percent against the yen to 102.30 yen. It rose as high as 102.44 yen at one point on trading platform EBS, the euro's highest level versus the Japanese currency in about seven weeks. The single currency rose 0.2 percent versus the dollar to $1.3281, having touched a two-month high of $1.3288 at one point.
While there are suggestions Greece is close to an agreement, Athens politicians have yet to agree to painful austerity measures to receive a second bailout package. They have delayed, once more, the deal deadline to Wednesday. The next level of resistance for the euro is found at the 100-day moving average of around $1.3334, ahead of $1.3436, the 50 percent retracement of the decline from the late-October high of $1.4248 to the mid-January low of $1.2624.
A trader for a major Japanese bank in Singapore said the euro could see more short-covering if Greece agrees to a deal. "The sense I get is that some short-term players have been putting on short euro positions," the trader said, adding that there was talk of stop-loss euro bids at levels above $1.3300. The dollar rose 0.3 percent to 77.03 yen, pulling away from a three-month low of 76.027 yen hit last week.
The yen fell broadly, with sterling rising 0.4 percent to 122.57 yen and the Australian dollar gaining 0.5 percent to 83.37 yen. Traders said sentiment toward cross/yen pairs has improved after they breached some resistance levels recently. Earlier on Wednesday, the yen showed little reaction to data showing that Japan's current account surplus shrank sharply to a 15-year low in 2011. The decline in the current account surplus came as no surprise, as it was preceded by data in January that showed Japan posted its first trade deficit since 1980 last year.