Euro resilient as hopes of Greek aid deal persist
By Ian Chua SYDNEY (Reuters) - The euro steadied early on Wednesday, having climbed off a five-week trough in line with a rebound in risk assets as the latest emergency meeting of European leaders ended with a sliver of hope still left for Greece. The common currency, which fell as far as $1.0916 on Tuesday, last stood at $1.1013. The turnaround was also evident in other currencies. The Australian dollar, usually sold off in times of heightened risk aversion, bounced to $0.7452 , from a six-year trough of $0.7398. U.S. stocks ended higher after a choppy session, while safe-haven Treasuries trimmed gains. Investors are also watching if China can successfully stem the slide in its stock market. Hopes of a deal were initially dashed after the new Greek finance minister brought no new proposals and left EU leaders with nothing concrete to discuss at Tuesday's emergency meeting. But euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of the currency bloc. Analysts at BNP Paribas said there was no reason to be particularly optimistic at this stage and warned that even a full resolution of Greek stress would still leave the door open for renewed euro weakness. However, "price action does suggest scope for more short-covering if markets begin to anticipate a deal," they wrote in a note to clients. Against the yen, the euro was just a touch softer at 134.905 , having survived a drop to a six-week trough of 133.520. The partial recovery in risk appetite took the shine off the safe-haven yen, allowing the dollar to drift back to 122.53 from 122.01. Even the Canadian dollar, which slumped to a three-month low on disappointing trade data, managed to regain a bit of ground. It last traded at C$1.2722 per U.S. dollar , after falling as deep as C$1.2780. Data on Wednesday showed Canada's trade deficit widened to its second largest on record in May as non-energy exports fell, fuelling expectations for a cut in interest rates. There is little to speak of in terms of market-moving economic data in Asia on Wednesday, leaving Greece and China in the spotlight.
