By Fabio Alves OF DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The dollar gained modestly against the euro Monday as investors await a resolution to Greece's fiscal problems as well as further monetary policy signals from the Federal Reserve.
Against its other key rivals, the dollar slipped lower in a quiet session marked by a lack of major economic data that left currencies mired in narrow ranges. Investors are waiting to see signs of progress on Greece, with meetings this week between European Union representatives and Greek authorities to discuss the country's finances.
A potential debt sale by Greece later this week is also contributing to some euro weakness. Adding to pressure on the common currency were comments by a German Finance Ministry spokesman that no decision has been made regarding aid for fiscally stressed
Greece, in a denial to media reports over the weekend on a possible rescue plan.
In the absence of fresh developments on Greece, traders are hoping to garner additional clues on the outlook for U.S. interest rates--a
key factor in the outlook for the dollar. Fed Chairman Ben Bernanke will deliver testimony to Congress on Wednesday, during which
investors are hoping to hear more on the exit strategy from the stimulus program put into action to combat the financial crisis and
"The market's in limbo because you have those debt sales this week [in Europe] and you have Bernanke's [testimony] on
Wednesday," said Jessica Hoversen, fixed-income and foreign exchange analyst at MF Global in Chicago. "Given the events that are
happening in the latter portion of this week, you'll probably going to see some quiet trade."
Late afternoon Monday in New York, the euro was at $1.3597 from $1.3613 late Friday, according to EBS via CQG. The dollar was at
Y91.13 from Y91.65, while the euro was at Y123.94 from Y124.64. The U.K. pound was at $1.5480 from $1.5467. The dollar was at
CHF1.0761 from CHF1.0767.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.552 from 80.611.
As a result, Deutsche Bank's PowerShares U.S. Dollar Index Bearish exchange-traded fund was up 0.15% from late Friday, while its
PowerShares U.S. Dollar Index Bullish was down 0.17%. The two exchange-traded funds are based on Deutsche Bank currency
futures indexes, whose composition mirrors that of ICE's Dollar Index.
To see the euro's moves against the dollar, please see chart at:http://www.dowjoneswebservices.com/chart/view/3487
The Greek government will be meeting with representatives from the European Commission, the European Central Bank and
International Monetary Fund technical experts this week to discuss a new set of austerity measures worth about EUR2.5 billion over
and above what it has already announced to cut the deficit.
Germany expects Greece will be able to refinance its debt sometime in March, the German Finance Ministry said Monday. However,
Ministry spokesman Martin Kreienbaum added that the German government has made no decisions on a package of aid for Greece,
including a specific form that help might take, and what the sum of that help would be.
Those comments were made amid unconfirmed reports that Greece's public debt management agency plans to auction EUR5 billion
of 10-year bonds this week.
"The euro is going to have a tough time rallying until the Greek saga comes to an end even if there have been fresh reports that
Greece could receive aid from some E.U. nations and they may actually want aid this time around," said Kathy Lien, director of
currency research at GFT Forex in New York. "In general, currency traders are holding off on buying more dollars until they hear from
Currencies showed little reaction to the Chicago Federal Reserve's closely-watched National Activity Index, which turned positive in
January, with data indicating that the U.S. economy was in the best shape since May 2007.