The euro held steady against the dollar on Friday ahead of a confidence vote in Greece that could set the stage for its approval of the new EU crisis plan - or a collapse of the Greek government. Although the day was rocky in trade, at 2200 GMT - just ahead of the vote in the Greek parliament - the euro was at $1.3788, slightly lower than $1.3808 around the same time Thursday.
It appeared to be holding steady even as Prime Minister George Papandreou told Greek lawmakers in a speech that he was ready to step down for a unity government and would hold talks on Saturday. The yen eased, with the euro was buying $107.89 yen, up from 107.82, while the dollar edged up to 78.23 yen from 78.07.
"Hopefully by the end of this evening, we will know whether Greek Prime Minister Papandreou wins or loses the no confidence vote. This is the biggest risk that the euro faces next week because the vote could mark a turning point in the Eurozone's debt crisis," said Kathy Lien of forex specialists GFT. "Unfortunately few of the region's problems have been resolved.
"For this reason, we could see additional volatility in the currency this week. The big risk is that Greece will not be able to receive its next aid payment in time to avoid a default." In addition, she added, Italy is facing increasingly similar fiscal and political problems that could erupt in the coming days. The dollar, on the other hand, could continue to benefit from stronger US growth data, compared to the eurozone, and the European Central Bank's quarter-point rate cut Thursday, analysts said. The dollar gained to 0.8846 Swiss francs, from 0.8787 francs Thursday, while the British pound was nearly unchanged at $1.6031.
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