SINGAPORE: The euro rose for the first time in five days after opinion polls in Greece showed voters warming to parties supporting the European Union's bailout, easing concern the country will exit the currency bloc.
The 17-nation currency rebounded from the lowest since July 2010 after data showed trader bets on a decline in the euro reached a record high. The dollar and yen weakened versus most of their 16 major counterparts on decreased demand for the currencies as a haven from Europe's debt crisis.
"The market's main focus remains on whether Greece has to leave the euro," said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. "Any sign that anti-austerity parties are running out of steam could trigger some unwinding of euro shorts." A short is a bet that an asset's price will fall.
The euro climbed 0.4% to US$1.2571 as of 8:38 a.m. in Tokyo from the close in New York on May 25, when it touched US$1.2496, the least since July 6, 2010. It added 0.4% to 100.11 yen. The dollar was little changed at 79.64 yen.
U.S. financial markets are shut today for the Memorial Day national holiday.
Hedge funds and other large speculators increased wagers the euro will decline versus the dollar to 195,361 in the period ended May 22, the most on record going back to 1999, according to the Washington-based Commodity Futures Trading Commission.
Greek Opinion Polls
New Democracy, which supports the plan negotiated with international lenders, placed first in all six opinion polls published on May 26 as campaigning continued for next month's general election. The party led by a margin of as much as 5.7 percentage points over Syriza, the main party opposed to implementing the terms of financial aid packages, according to a poll by Kapa Research SA for To Vima newspaper.
The euro has declined 4.6% in the past six months, the biggest loser among the 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has climbed 1.7%, while the yen lost 0.7%.
Demand for the European currency was limited before data that may show the prolonged debt crisis is hurting the region's economic growth.
A final reading will probably confirm that consumer confidence in the euro area was at minus 19.3 in May, little changed from minus 19.9 in the previous month, according to economist estimates in a Bloomberg News survey before the figures are released May 30.
The unemployment rate climbed to 11% in April, the highest in data compiled by Bloomberg going back to 1990, economist forecasts in a separate poll showed before the June 1 report. (Bloomberg/aph)
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