Euro rises in Asia

The euro rose versus the dollar on Friday, its gains accelerated by stop-loss buying, with mounting hopes for a Greek bond swap deal also lending the single currency support. The euro had been supported by short-covering after debt sales in Spain and Italy the previous day drew solid demand, and added to its gains late in the Asian session after triggering stops near $1.2850/60, traders said.
The euro rose 0.4 percent to $1.2859, having climbed to as high as $1.2879 at one point, and pulling further away from a 16-month low near $1.2662 hit earlier in the week. In addition to stop-loss bids, hopes that Greece may soon reach a deal with private creditors for a voluntary debt exchange helped boost the euro, traders said.
A deal with private creditors to voluntarily write down at least half the value of their Greek sovereign bonds has a good chance of happening in the coming days, the chief executive of French bank Societe Generale told newspaper Les Echos. The euro had already been on solid footing after Spain sold twice the planned amount at its debt sale on Thursday and Italy's auction of short-dated debt also drew strong demand, raising expectations that an auction of Italian bonds later on Friday will also do well.
Technical signals suggested that the euro might get some reprieve against the Australian dollar in the wake of its recent slide, even if a sharp rebound is unlikely. "We are thinking that the risk is you have a small bounce," said Dhiren Sarin, chief technical strategist Asia FX for Barclays Capital in Singapore, adding that the euro's rise against the Australian dollar the previous day produced some bullish technical signals.
Against the Australian dollar, the euro rose 0.2 percent to A$1.2427, having bounced off a record low of A$1.2291 struck on Thursday. The European Central Bank kept interest rates unchanged at 1.0 percent on Thursday and said its flood of cheap 3-year loans was helping banks, adding that the euro zone's economy was showing some signs of stabilisation in activity. Indeed, analysts said some of the near half a trillion euros of three-year funds injected by the ECB last month probably went into supporting Thursday's debt auctions.