* Germany wants to bundle Greek aid - newspaper
* Report lifts euro off 2-month low versus dollar
* Uncertainties remain, may limit gains
* Weak ZEW data highlights problems facing Germany
By Jessica Mortimer and Philip Baillie
LONDON, Nov 13 The euro pulled away from a
two-month low against the dollar on Tuesday after a German
newspaper said Germany wants to bundle Greek aid into a single
payment of more than 44 billion euros.
Traders interpreted the Bild report, which cited government
sources, as a sign that the euro zone's paymaster was eager to
see a deal done after euro zone ministers on Monday stopped
short of releasing aid under Greece's bailout programme.
But the euro remained vulnerable to uncertainty over funding
for the debt-stricken country. Asked about the report, a German
finance ministry spokeswoman said no final decision had been
made on Greek loans.
The euro was last flat at $1.2703, having earlier
dropped around 0.3 percent to $1.26615, its lowest since
Sept. 7, in reaction to the euro zone finance ministers' meeting
and weak German data.
Traders said a reported options expiry at $1.27 later on
Tuesday may influence trade and keep it close to that level.
"If there are signs that Greece could get a disbursement
before they run dry of money that would give the euro a boost,"
said Dag Muller, technical analyst at SEB.
But he said the euro could stall ahead of chart resistance
around $1.2850-$1.2900. SEB forecast the euro would rise to
$1.32 by the end of the year, although Muller said this was
conditional on Greece getting the funding it needs.
Bild said the payment would comprise the 31.3 billion euros
dating from the second quarter that Greece hopes to receive soon
to avert bankruptcy, with further tranches of 5 billion euros
and 8.3 billion euros for the third and fourth quarters.
The lack of a fresh aid payment meant Greece had to roll over
It sold 4.062 billion euros of treasury bills on Tuesday.
Although this was not be enough to finance a 5 billion issue
maturing on Friday, it will be followed by the proceeds of
non-competitive bids for the paper in coming days.
The euro fell earlier as Greece's international lenders
clashed over the time Athens needs to bring its debt down.
The finance ministers said it should be given until 2022 to
lower its debt to GDP ratio to 120 percent but International
Monetary Fund chief Christine Lagarde insisted the existing
target of 2020 should remain.
A weak German ZEW sentiment survey, which showed a drop to
-15.7 in November from -11.5 in October, also heightened
concerns about the impact of the euro zone crisis on Europe's
largest economy and knocked the euro.
It traded down 0.1 percent against the yen at 100.95 yen
, above an earlier one-month low of 100.35 yen.
"The fact that spreads of Spain and Italy have not
compressed more has brought this crisis back to the mindset of
the market and that is reflected mainly in the ZEW survey,"
Ulrich Leuchtmann, Head of FX Research at Commerzbank in
"Therefore it is a clear indication the crisis-over mood is
beginning to be priced out," he said.
The euro has fallen steadily since hitting a peak of $1.3140
in mid-October as the euphoria over a European Central Bank
bond-buying scheme faded.
Eurogroup Chairman Jean-Claude Juncker said on Monday the
ministers would meet again on Nov. 20, though officials said
more talks could be needed the following week to cement a deal.
The dollar index was steady at 81.075, having earlier
hit a two-month high of 81.241.