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Euro rises on narrowing spread of Greek vs German debt Aussie down as RBA surprises and holds rates at 3.75 pct Market awaits White House adviser Volcker's testimony (Recasts, updates prices) NEW YORK, Feb 2 (Reuters) - The euro rose against the dollar on Tuesday, supported by a narrowing in Greek government bond yield spreads over German debt, ahead of the European Commission's reaction to Greece's internal plan to strengthen its finances. Greek Prime Minister George Papandreou said the level of Greek and euro zone bond spreads was "completely unjustified," keeping up the rhetoric against speculators he blames for targeting his country. The comments came ahead of the publication on Wednesday of EU recommendations to Athens on its austerity plan. The Commission's much-anticipated assessment is likely to be in line with what Greece itself has promised to do in its long-term deficit-cutting plan. This suggests there may only be limited scope for stop-loss-driven selling and position unwinding to drive AUD lower. On balance, we believe it is unwarranted to shift away from a positive view on AUD." Risk sentiment will be under scrutiny later when White House adviser Paul Volcker appears before the Senate Banking Committee to defend the administration's proposal to limit risk-trading by banks, which spooked investors and triggered a sell-off in equities when it was unveiled last month. According to testimony obtained by Reuters, Volcker will urge Congress to curb the risks taken by large banks to help prevent them from being treated as "too big to fail.
Euro rises on narrowing spread of Greek vs German debt Aussie down as RBA surprises and holds rates at 3.75 pct Market awaits White House adviser Volcker's testimony (Recasts, updates prices) NEW YORK, Feb 2 (Reuters) - The euro rose against the dollar on Tuesday, supported by a narrowing in Greek government bond yield spreads over German debt, ahead of the European Commission's reaction to Greece's internal plan to strengthen its finances. Greek Prime Minister George Papandreou said the level of Greek and euro zone bond spreads was "completely unjustified," keeping up the rhetoric against speculators he blames for targeting his country. The comments came ahead of the publication on Wednesday of EU recommendations to Athens on its austerity plan. The Commission's much-anticipated assessment is likely to be in line with what Greece itself has promised to do in its long-term deficit-cutting plan. This suggests there may only be limited scope for stop-loss-driven selling and position unwinding to drive AUD lower. On balance, we believe it is unwarranted to shift away from a positive view on AUD." Risk sentiment will be under scrutiny later when White House adviser Paul Volcker appears before the Senate Banking Committee to defend the administration's proposal to limit risk-trading by banks, which spooked investors and triggered a sell-off in equities when it was unveiled last month. According to testimony obtained by Reuters, Volcker will urge Congress to curb the risks taken by large banks to help prevent them from being treated as "too big to fail.
