The euro has clawed back ground from the US dollar after G8 leaders and the foreign ministers of Germany and France pledged to work hard to keep Greece in the eurozone.
While worries remained deep about the fate of the 17-nation eurozone, statements from the weekend summit of G8 leaders near Washington encouraged traders.
“We agree on the importance of a strong and cohesive eurozone for global stability and recovery,” they said in a joint communique.
“We affirm our interest in Greece remaining in the eurozone while respecting its commitments.”
The finance ministers of Germany and France reiterated that Monday after a meeting in Berlin.
“We agreed that we have to do everything to keep Greece in the euro club,” German Finance Minister Wolfgang Schaeuble said in a joint press conference with his French counterpart Pierre Moscovici.
The comments helped the euro on Monday add 0.4 per cent on the US dollar, moving to $US1.2815 from $US1.2773 late Friday.
The yen, a safe haven in recent weeks, fell back Monday, trading to 79.30 yen per dollar from 78.95, and to 101.62 per euro from 100.94.
But continuing doubts over Greece’s commitment to the euro capped the euro’s rebound, with analysts saying it was still on a dangerous path going into the elections one month from now.
“The euro has dropped 3.5 per cent since the start of May as the inconclusive May 6 Greek election outcome has weighed on the currency,” said Nick Bennenbroek of Wells Fargo.
“While not our base-case, we do believe the chance of a euro exit has risen to perhaps 25 per cent to 30 per cent.”
The British pound pushed slightly higher, to $US1.5833 from $US1.5815.
The US dollar fell to 0.9372 Swiss francs from 0.9397.