Forex: Wednesday’s review

Yesterday the euro rose for a second day versus and yen as European governments pressed Greece to make deeper spending cuts to keep aid flowing as they pushed to resolve the region’s three-year-old sovereign-debt crisis.

The 17-nation currency earlier erased a gain against the dollar after German Finance Minister Wolfgang Schaeuble said the timely payment of Greece’s next tranche of aid was “ambitious.” It strengthened earlier against most of its 16 major peers before Portuguese lawmakers hold an initial vote tomorrow on the 2013 budget proposal.

With Greece pleading for a 31 billion-euro ($40 billion) aid payout in November and facing a sixth year of recession in 2013, euro finance ministers said unfreezing loans for the country required more efforts in Athens to rein in the budget deficit and deregulate the economy.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, was little changed at 79.897.

U.S. stock markets erased an earlier gain as trading resumed after a two-day shutdown for Hurricane Sandy, which broke up over Pennsylvania after battering the East Coast since Oct. 29.

The pound strengthened for a second day against the dollar amid speculation the Bank of England will refrain from adding monetary stimulus to the economy when it meets next week. The central bank will announce on Nov. 8 whether to increase its target for asset purchases, or quantitative easing, from 375 billion pounds ($604 billion) after data last week showed gross domestic product expanded 1 percent last quarter as the economy emerged from a recession.

The Canadian dollar fell after the August 2012 Canadian GDP unexpectedly fell by 0.1% compared to 0.2% in July. Governor of the Bank of Canada Carney reiterated that "eventually" may need to raise interest rates.