NEW YORK: The euro climbed to three-weak peaks against the dollar on Monday, on optimism about Greece's prospects after the government reshuffled its bailout negotiating team to forge a deal with lenders about more aid for the cash-strapped country and avoid a default.
Greece looks set to run out of funds in the coming weeks.
On Monday, Greek Prime Minister Alexis Tsipras appointed Deputy Foreign Minister Euclid Tsakalotos, an economist well liked by officials representing creditors, as coordinator of the country's bailout negotiating team, giving him a more active role in the negotiations.
That would sideline Finance Minister Yanis Varoufakis, who had been very active in the Greek negotiating team. The Varoufakis-led team came out empty-handed from Friday's Eurogroup meeting in Riga.
"Tsipras reshuffling the bailout negotiating team has given the euro a bit of a boost," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"There was probably a view that Varoufakis was an obstacle to concessions on the Greece end. At the margin, this increases the hope for some positive developments from the Greece-EU debt negotiations." In midday trading, the euro rose as high a $1.0907 against the dollar, the highest since April 7.
It was last up 0.2 percent at $1.0895.
The dollar index, meanwhile, fell 0.3 percent to 96.680 , a three-week low.
Investors are bracing for a Federal Reserve monetary policy meeting this week.
The Fed's decision on Wednesday will help set the tone for the dollar in the near to medium term.
The dollar's searing rally since the summer of last year had slowed following a run of poor US economic numbers, including a softer-than-expected non-farm payrolls report for March.
That has cemented expectations for a more gradual pace of interest rate increases by the Fed. Last week, weak figures for new home sales, weekly jobless claims and business spending undermined the dollar.
"Any sense from the Fed that a rate hike appears on a further horizon could mean a weaker US currency above levels like $1.10 versus the euro," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Helped at the margins by a cut in Japan's credit rating by Fitch, the dollar gained 0.1 percent to 119.10 yen, still well below last week's high of 120.10 yen.
The Bank of Japan meets on Thursday and is widely expected to hold policy steady.
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