Euro up in London

The euro rose to a two-week high against the dollar on Wednesday on expectations the Greek parliament will pass austerity measures needed for a further bailout although the stop-gap nature of the plan was seen limiting gains. Hopes the vote would go through were boosted as Greek conservative opposition lawmaker Elsa Papadimitriou said she would vote in favour of an austerity plan despite her party's rejection of the measures.
This lifted the euro to $1.4449 on trading platform EBS, surpassing last week's high around $1.4442, with traders citing stops above $1.4450 and more above $1.4500. Sentiment towards the euro was also buoyed by comments on Tuesday by European Central Bank President Jean-Claude Trichet, which markets interpreted as signalling a July interest rate hike. The euro also hit a three-week high against the yen around 117.17 yen.
The euro gained 0.7 percent against the safe-haven Swiss franc to 1.2033 francs, taking it away from its record low around 1.1808 francs. Wariness about the outlook for the euro remained evident in risk reversals, however, which continued to show strong demand for bets on the euro falling against the dollar. The 25-delta euro/dollar risk reversal traded around 2.85 in favour of euro puts, well above a level of around 1.75 in early June.
The euro's rebound saw the dollar index, which tracks the greenback's performance against a basket of major currencies, fall 0.4 percent to 74.729, off this week's peak of 75.987. The Aussie dollar firmed 0.8 percent to $1.0622, well above an 11-week trough just below $1.0400 plumbed on Monday.
Against the yen, the dollar was steady at 81.08 yen after falling to an Asian session low of 80.93 yen. Late on Tuesday it rose to 81.26 as an increase in US Treasury yields prompted flows into the US currency but later edged down on sales by Japanese exporters and foreign margin traders, Tokyo dealers said. "We've seen a typical risk-on situation with both the dollar and the yen put under selling pressure. In such a situation dollar/yen benefited from a rise in long-term Treasury yields," said Tohru Sasaki, the head of Japan rates and forex research at J.P. Morgan Chase Bank in Tokyo.