TOKYO: The euro held steady on Wednesday, finding some support as investors held on to hopes that Greece will find enough common ground with its euro zone partners and avoid a chaotic exit from the currency union.
The euro traded at $1.1405, staying above this week’s low of $1.13195 hit on Monday.
Although Greece rejected a proposal to request a six-month extension of its international bailout on Monday, market players are betting that an agreement will be reached in the next couple of weeks.
A source close to the government said Greece intends to ask on Wednesday for an extension of a loan agreement with the euro zone.
The source drew a distinction between a loan agreement and the full bailout programme, which the new government insists is dead.
Still, investors expect a compromise on the bailout programme will be reached as failure to do so could lead to a disorderly Greek exit from the currency bloc.
Until the standoff over Greece’s demands is resolved, markets will likely stay on edge, limiting any gains in the euro in the near term.
“There remains uncertainty on whether the bailout programme will be extended,” said Shin Kadota, chief FX strategist.
