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FOREX-Euro wobbles near 2-mth low; hurt by Greece, economy woes
November 14, 2012 / 12:57 AM / 5 years ago

FOREX-Euro wobbles near 2-mth low; hurt by Greece, economy woes

* Uncertainty on Greece deal keeps euro shackled

* Weak German business confidence highlights spreading pain

* Lump sum transfer plan idea for Greece supports euro

* Euro gets support from 90-day moving average, cloud bottom

By Hideyuki Sano

TOKYO, Nov 14 (Reuters) - The euro licked wounds near a two-month low on Wednesday, hurt by uncertainty over Greece and weak German business confidence data that highlighted rising pain in stronger European economies.

The euro traded at $1.2702, having fallen on a weak German ZEW sentiment survey to $1.2661 on Tuesday, its lowest level in more than two months and its 90-day moving average.

Below the 90-day average, the euro has more technical support from the Ichimoku cloud bottom at $1.2652.

But a break there would be considered a major bear signal that could lead to a test of the 50 percent retracement of its July-September rally at $1.2608.

On Tuesday, however, hopes that international lenders may be getting close to disbursing aid to Athens helped the single currency find a floor.

A German newspaper said Germany wants to bundle Greek aid into a single payment of more than 44 billion euros and German Finance Minister Wolfgang Schaeuble later also said such an idea was under consideration.

Still, that cannot happen until its lenders reach a broader agreement, and the International Monetary Fund and euro zone policymakers remain at odds over a long-term target to bring Greece’s debt down and the IMF’s push for the euro zone to take further losses on Greek debt.

“For the moment, the market’s focus is on whether they can decide on a deal for Greece next week,” said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

Another meeting of the 17-nation Eurogroup is due to take place on Nov. 20 but officials said more negotiations could be required the week after that to nail down a new deal.

Against the yen, the euro stood at 100.61 yen, after having hit a one-month low of 100.33 yen on Tuesday.

The euro’s woes also helped the dollar index to hit a two-month high of 81.241 on Tuesday. It last stood at 81.113 .

The dollar, whose huge liquidity makes it a safe haven asset for investors, was also supported by concerns about the U.S. fiscal cliff - looming budget cuts and tax increases that threaten to tip the U.S. economy into recession if Congress cannot agree on a deal by the end of the year.

The dollar was hemmed in against the yen in a well-trodden range, trading at 79.48 yen.

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