The euro strengthened to an almost three-week high against the dollar as French Finance Minister Francois Baroin said negotiations between Greece and its private creditors are making “tangible progress.”
The 17-nation currency gained versus 13 of its 16 major counterparts tracked by Bloomberg as European Union finance ministers gather in Brussels to discuss a Greek debt swap, budget rules and a financial firewall to protect indebted nations. The Australian and New Zealand dollars gained as the implied volatility of major currencies reached the lowest in almost a year and commodities and equities rallied.
“The price action is putting the cart before the horse by assuming that since risky currencies and the euro are rallying that something is going to get done in Europe,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp. “There has been quite a sea-change in the past couple weeks in terms of market sentiment and risk appetite and those that were talking about the euro going to parity are eating their words.”
The euro gained 0.6 percent to $1.3014 at 9:01 a.m. New York time after rising to $1.3032, the highest level since Jan. 4. The common currency advanced 0.5 percent to 100.11 yen, while the dollar dropped 0.1 percent to 76.93 yen.
The MSCI World Index fell 0.3 percent and the Thomson Reuters/Jefferies CRB Index of raw materials added 0.7 percent.
