WASHINGTON: The euro regained ground on the dollar Monday propelled by rumors that Italy was negotiating a rescue package with the IMF and that EU leaders were moving toward a crisis resolution deal.
But a denial by the International Monetary Fund, and a dire warning from the OECD that Europe's economies are one step away from plunging into recession, tempered the rise.
At 2200 GMT the euro was at $1.3318, up from $1.3240 late Friday.
Earlier it traded near the $1.34 level.
The euro also picked up to 103.83 yen from 102.90 yen, while the dollar edged up to 77.97 yen from 77.72.
Underpinning the euro's tentative rebound was hope that meetings by Europe's top finance officials on this week will offer a convincing path out of crisis for the eurozone.
"With Eurozone finance ministers meeting in Brussels tomorrow and EU finance Ministers meeting on Wednesday, there is a realistic chance of progress and that is the main reason why the euro has rallied," said Kathy Lien of currency specialists GFT.
However, she added, "until there is substance to any of the rumors and speculation in Europe, euro traders should be cautious. With Italian bonds being auctioned off on Tuesday and Spanish and French bonds being auctioned on Thursday, expect more volatility in the euro."
The dollar eased to 0.9224 Swiss francs from 0.9299. The British pound rose to $1.5508, from $1.5436 Friday.
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