The euro edged up on Monday after Greece's parliament approved an austerity bill that put the country a step closer to securing much-needed funds, though market players worried about more hurdles before lenders seal a bailout deal. Violent street protests in Athens and the departure of six Greek cabinet ministers underscored the difficulty of implementing unpopular steps.
Eurozone finance ministers also expect Greece to explain how 325 million euros ($430 million) of this year's total budget cuts - as yet unspecified - will be achieved before it agrees to the bailout in a meeting on Wednesday. "I'm not sure if it's time for a hurrah. It's still uncertain whether euro zone finance ministers will agree on the bailout," said Masafumi Yamamoto, chief forex strategist at Barclays Capital.
The euro gained about 0.3 percent to $1.3235, recouping some of the losses made on Friday and about a cent below a two-month high of $1.3322 hit last week. Its 90-day moving average of $1.3314 is seen as a major resistance point, though a break there could open the way for a test around $1.35.
Highlighting exasperation felt by Germany, the country's finance minister, Wolfgang Schaeuble, said in an interview with German newspaper Welt am Sonntag that Greek promises on austerity measures are no longer good enough because so many vows have been broken. There are also concerns that hedge funds may have built up sufficiently large holdings of Greek bonds to scupper "voluntary" bond swap deals.
On the other hand, the euro is likely to draw some support from signs of stability in other euro zone countries, with the spread of Portuguese bond yields over German bonds slipping to one-month lows. Amid improved sentiment for risk assets after Greece's vote, the Australian dollar gained 0.5 percent to $1.0720, though it was off a two-month high of $1.0845 marked last week.
The New Zealand dollar rose 1.0 percent to $0.8346. The yen eased briefly on speculation of more easing by the Bank of Japan and a weaker-than-expected reading in Japan's GDP. The dollar rose to 77.78 yen, just below a two-week high of 77.81 yen hit on Friday, though offers from Japanese investors repatriating coupon pavements on US bonds later this week were enough to push it back to around 77.63 yen.