Euro recovers early losses at the top of the proposals
* Fears of default had led to loss of
(Updates prices, adds details, changes dateline to, previous LONDON)
NEW YORK, July 21 (Reuters) - The euro rose sharply Thursday, reversing losses in the signals from European officials were almost a deal to bail out of Greece, with the help of the private sector, although some investors remained concerned about the possibility of a short-term failure.
The euro has plunged in early trading as players adjusted upward some of the positions built before the summit of leaders of the Eurozone - prompted largely by a reflex response officials say a selective defect was possible.
Before the crisis summit, said Dutch Finance Minister Jan Kees de Jager a standard short-term or selective for Greece, which previously opposed the European Central Bank, is now a possibility.
But EU sources said the ECB, one of the main obstacles to a broader solution to the crisis in Greece, was willing to give way to standard questions. [ID: nL6E7IK2VL]
The euro rose to $ 1.4328, well below the session low of $ 1.4137, after the draft proposals emerged from the summit, which refers to the extension of the European Financial Loans Ease of stability and allow the rescue fund to intervene.
"Extending loans to Greece, and greater flexibility EFSF recapitalize institutions takes the heat away from the ECB," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "It 'definitely positive for the euro. It is not a panacea, but it is a step in the right direction."
The euro traded at $ 1.4319 last up 0.7 percent.
FEAR Chalking
Fears that the crisis could spread the debt of Greece's largest economies in the euro have held the edge in the market since the beginning of July, the income from the Italian and Spanish government bonds in the euro area recorded a life expectancy of more than 6 percent.
Analysts said market participants should try to see if the summit agreement calmed the concerns of communicable diseases.
"Everything that comes out is really impressive to limit the risk of infection in Italy and Spain, which has been made in recent weeks," said Derek Halpenny, currency strategist at Bank of Tokyo-Mitsubishi UFJ.
Investors were also cautious of the period 2 August to increase the U.S. debt ceiling to avoid default, and a real threat for the higher rating of the United States.
Federal Reserve Bank of Philadelphia, Charles Plosser, president of the Bank, told Reuters on Wednesday that the Federal Reserve has been actively involved preparing for the possibility that the U.S. could default. [ID: nN1E76J22J]
The dollar extended losses against the euro after the U.S. data showed new unemployment claims rose more than expected last week. Initial claims for unemployment benefits rose 10,000 to a seasonally adjusted state of 418,000, the Labor Department said [ID: nLLALIE7OH].
"Unfortunately, the trend is in the wrong direction," said Todd Horwitz, director of Group Strategy Adam Mesh Trading in Chicago.
* Fears of default had led to loss of
(Updates prices, adds details, changes dateline to, previous LONDON)
NEW YORK, July 21 (Reuters) - The euro rose sharply Thursday, reversing losses in the signals from European officials were almost a deal to bail out of Greece, with the help of the private sector, although some investors remained concerned about the possibility of a short-term failure.
The euro has plunged in early trading as players adjusted upward some of the positions built before the summit of leaders of the Eurozone - prompted largely by a reflex response officials say a selective defect was possible.
Before the crisis summit, said Dutch Finance Minister Jan Kees de Jager a standard short-term or selective for Greece, which previously opposed the European Central Bank, is now a possibility.
But EU sources said the ECB, one of the main obstacles to a broader solution to the crisis in Greece, was willing to give way to standard questions. [ID: nL6E7IK2VL]
The euro rose to $ 1.4328, well below the session low of $ 1.4137, after the draft proposals emerged from the summit, which refers to the extension of the European Financial Loans Ease of stability and allow the rescue fund to intervene.
"Extending loans to Greece, and greater flexibility EFSF recapitalize institutions takes the heat away from the ECB," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "It 'definitely positive for the euro. It is not a panacea, but it is a step in the right direction."
The euro traded at $ 1.4319 last up 0.7 percent.
FEAR Chalking
Fears that the crisis could spread the debt of Greece's largest economies in the euro have held the edge in the market since the beginning of July, the income from the Italian and Spanish government bonds in the euro area recorded a life expectancy of more than 6 percent.
Analysts said market participants should try to see if the summit agreement calmed the concerns of communicable diseases.
"Everything that comes out is really impressive to limit the risk of infection in Italy and Spain, which has been made in recent weeks," said Derek Halpenny, currency strategist at Bank of Tokyo-Mitsubishi UFJ.
Investors were also cautious of the period 2 August to increase the U.S. debt ceiling to avoid default, and a real threat for the higher rating of the United States.
Federal Reserve Bank of Philadelphia, Charles Plosser, president of the Bank, told Reuters on Wednesday that the Federal Reserve has been actively involved preparing for the possibility that the U.S. could default. [ID: nN1E76J22J]
The dollar extended losses against the euro after the U.S. data showed new unemployment claims rose more than expected last week. Initial claims for unemployment benefits rose 10,000 to a seasonally adjusted state of 418,000, the Labor Department said [ID: nLLALIE7OH].
"Unfortunately, the trend is in the wrong direction," said Todd Horwitz, director of Group Strategy Adam Mesh Trading in Chicago.
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