EUR/USD Steady Below 1.09 on Greek Hopes

The euro hovered near a three-week peak on Tuesday, having pushed higher overnight as the dollar came under broad pressure and on renewed hopes that cash-strapped Greece was a step closer to securing fresh funding.  The dollar awaited U.S. data later in the day which could either hasten its fall against the euro or arrest its decline ahead of the closely-watched two-day Federal Reserve meeting that begins Wednesday.

The S&P/Case Shiller housing index and consumer confidence data will provide a glimpse into the state of the U.S. economy, which is yet to gain full momentum and has doused market expectations for an interest rate hike by the Federal Reserve in June.  The euro climbed as far as $1.0927 and last stood at $1.0877. It is nearing the top-end of a $1.0457-$1.1062 range since hitting a 12-year trough in mid-March.

Greek Prime Minister Alexis Tsipras on Monday reshuffled his team handling talks with European and IMF lenders, a move widely seen as an effort to relegate embattled Finance Minister Yanis Varoufakis to a less active role in negotiations.  “Varoufakis’ hard-ball tactics have been a source of huge frustration for the Brussels group of international creditors,” said Ray Attrill, global co-head of FX strategy at NAB.