The euro strengthened from the lowest since July 2010 against the dollar as pre-election polls showed Greece’s pro-bailout parties gaining ground, damping concern the nation will exit the currency bloc.
The Dollar Index weakened for the first day in five even as data showed trader bets on a decline in the euro reached a record high. The yen gained for the first time in three days against the dollar after minutes of the Bank of Japan (8301)’s April meeting damped speculation policy makers will boost monetary easing to achieve a 1 percent inflation goal.
“It’s a momentary respite” for the euro, said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. (BK) in London. “There hasn’t been any positive news other than these polls. It’s a watch-and-wait market.”
The euro strengthened 0.5 percent to $1.2577 at 10:04 a.m. London time, after climbing as much as 0.9 percent. It dropped to $1.2496 on May 25, the weakest since July 2010. The euro was little changed at 99.84 yen. The U.S. currency weakened 0.4 percent to 79.37 yen
The 17-member shared currency has depreciated 5 percent versus the greenback this month, poised for the biggest monthly slump since September. The euro has declined 2.9 percent this year.
U.S. financial markets are shut today for the Memorial Day national holiday.