LONDON, Jan 20 Reuters)-the euro retreat from to support a two-week high against the dollar on Friday as rally some investors took profits on short covering but can Greece cautious hope shortly before an agreement to avoid a chaotic debt saw standard set.
The single currency was last by 0.3 percent to $1.2920, falling from a peak of $1.2986 in early trading in London, but keep reached well above that last week 17-month low of $1.2624.
So far this week the euro has more than 2 percent, put them on the way to the largest of the increase in October after solid bond strengthened auctions in Spain and France on Thursday risk-taking won.
Analysts said that it was normal profit taking see, after a strong rally and the euro was stay probably short term supported to await the outcome of Greek negotiations as investors.
Greece and his private bondholders resume negotiations bond redemptions will pave Friday among signs that it closer to a deal that are inching fresh the way for an injection of aid from EUR 14.5 billion due in March.
A positive outcome of the talks could strengthen the euro, while restoring investors of bearish bets could see all negative messages.
"This is only profit-taking – rather, we had a linear rally since Monday morning." "On the other hand we could see more medals of championship points, but I think that we are between $1.2860, $1.30, hold", Geoff Kendrick, FX strategist at Nomura said.
"Because the result (the talks) is so binary, rather in market sentiment one way or another go." "We see on well there as more risk at the moment."
Investors betting against the euro stacked after rating agency standard & poor nine euro zone countries, including France and Austria last week downgraded.
Since then, the mood has improved, and some market participants said, that the resolution of these items can be euro another lift in the near future it pushing $1.30 by reported that offers from around, although further gains could be difficult.
"It is not only about Greece." We have a risk to definitely step and we know that there are a lot of euro-dollar shorts on the market. "I expect to $1.30 today but the steam run, if the rally goes much higher,", said Lutz Karpowitz, currency analyst at Commerzbank.
The euro was again against the yen by 0.3 percent to 99.70, that had a rest since is an 11-year low of 97.04 yen on Jan. 16.
Apart from the credit risk market participants see a chaotic Greek still downside risks to the euro in the coming year because of concerns the economy of which progress towards the consolidation of public finances in the region can slip euro zone into recession and limit.
SLOW CHINA MANUFACTURING
The euro and the Australian dollar risk-sensitive took in their purchase a survey result China manufacturer 2012 started in a slow mode.
The HSBC Flash: manufacturing purchasing manager index (PMI), which was the earliest indicator of China's industrial activity, is in January to 48.8 below the 50 area, the expansion from contraction.
The reading was the highest in three months, and finally was a slight improvement over the 48.7 for the December index.
The Australian dollar eased 0.1 percent to $1.0405, floating made in the vicinity one 11-week high of $1.0450 earlier this week.
The dollar slightly higher in comparison to a basket of currencies, 80.382, way from a two-week low of 79.99 earlier in the session taken.
The dollar rose against the yen 0.1 percent 77.18 yen, hovering close to the top of the range 76.30 yen 77.342 Yen seen so far in January.
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