Euro rises on hopes for Greek debt deal

The euro rose Thursday on hopes for a deal in Greece’s debt standoff, while the dollar was under pressure after Federal Reserve policy meeting minutes suggested it was in no hurry to hike interest rates.

In Tokyo, the single currency strengthened to $1.1413 and 135.46 yen, from $1.1398 and 135.35 yen in New York.

The dollar slipped to 118.68 yen from 118.76 yen.

Greece is due to make a formal request for a loan extension from eurozone finance ministers Thursday, and said it was “optimistic” about a compromise plan despite EU scepticism and the spectre of a catastrophic exit from the eurozone.

Athens is expected to send a letter to Jeroen Dijsselbloem, head of the Eurogroup of EU finance ministers, to request an extension of up to six months on its European loan agreement that would sidestep the duties of a full-blown bailout.

Greek Finance Minister Yanis Varoufakis insisted a deal was still possible even after EU paymaster Germany turned up its nose to the planned offer.

“We are on the right path, I am optimistic it will end well tomorrow or the next day,” Varoufakis told reporters on Wednesday.

“Our proposition will be written in such a way that it will cover both the demands of the Greek side and the head of the Eurogroup,” he said.

In the US, minutes of the Fed’s January policy meeting showed board members remain cautious about lifting rates too soon, despite a healthy recovery in the world’s number one economy.

While markets still see the central bank raising rates around the middle of the year, which would tend to boost the dollar, the latest news dampened expectations that it will come sooner than later.

“Expectations for a June rate increase by the Fed are retreating,” Junichi Ishikawa, a market analyst at IG Markets Securities in Tokyo, told Bloomberg News.

“The strong dollar story may be coming to the point where it has to be re-evaluated.”

The dollar was mixed against other Asia-Pacific currencies.

It rose to Tw$31.63 from Tw$31.61 on Wednesday, to 62.34 Indian rupees from 62.27 rupees and to 12,846.20 Indonesian rupiah from 12,810.00 rupiah.

It also gained to 44.25 Philippine pesos from 44.24 pesos but fell to Sg$1.3583 from Sg$1.3585, to 1,108.28 South Korean won from 1,110.45 won and to 32.54 Thai baht from 32.58 baht.

The Australian dollar fell to 78.01 US cents from 78.21 cents, and the Chinese yuan edged down to 18.97 yen from 19.03 yen.