Euro, high-yielding currencies up in London

The euro and high-yielding currencies rose on Tuesday, boosted by improved risk appetite after Chinese data eased global growth concerns and taking a hike in Chinese banks' reserve requirements in their stride. Traders said the single currency looked a sell on rallies, however, owing to Greece's debt crisis and uncertainty over how much the private sector will be involved in a new aid package for Athens.
China raised banks' reserve requirements by 50 basis points, a move that saw the Australian dollar shed some of its earlier gains and weighed marginally on the single currency. Chinese inflation surged to its highest in 34 months, and taken together with the reserve requirement hike, analysts said the authorities there were trying to engineer a soft landing for the economy. That could benefit risk in the near term, with European stocks holding on to solid gains while US stock futures pointed to a firm start.
"There is no doubt the Chinese are trying to engineer a soft landing for the economy," said Gavin Friend, currency analyst at NAB Capital. "Risk appetite is supporting the euro but what it really needs is a quick resolution to the Greek debt crisis for a push higher."
The euro hit a session high of $1.4473 on the EBS trading platform before easing back to $1.4432, up 0.1 percent for the day. Traders said sovereign accounts were selling above $1.4450. The euro managed to climb as eurozone finance ministers meet to discuss on Tuesday how private Greek bondholders should be involved in a second financing package for debt-laden Greece ahead of a self-imposed June 20 deadline for a deal.
The dollar index, which tracks its performance against a basket of major currencies, dipped to 74.376, off a two-week high of 74.960 struck the previous day. It was close to flat for the day at 80.14 yen. The Swiss franc, an outperformer in recent sessions, fell broadly as better risk appetite led investors to book profits in the safe-haven currency.
The euro was up 0.35 percent on the Swiss franc at 1.2108 francs with Barclays saying in a note that the pair was edging towards oversold levels on the weekly RSI charts. Meanwhile, the high-yielding Aussie was up 0.4 percent at $1.0650, boosted by the better tone for risk and as traders reported strong demand in the $1.0620/30 area.