Euro Strengthens Against Dollar Amid Greek Progress

Following its largest decline in two weeks, the euro strengthened against the dollar on Tuesday, January 31, on reports from Greek Prime Minister Lucas Papademos that debt-swap talks are progressing, reports Bloomberg.

According to the news source, the euro rose for the first time in four days against the yen following a meeting of top-level European officials in Brussels during which an agreement was made to accelerate the unveiling of a rescue fund.

Still, analysts are skeptical about the strengthening of the euro and the positive news coming from the continent.

"I don’t think peace has broken out, even if we have some short-term problems sorted in Europe," Thomas Molloy, chief dealer at FX Solutions, an online currency-trading company, told the news source. "It’s risk-on today, but more as a result of what’s going on despite Europe rather than what is going on in Europe, and the rising tide is floating all boats."

The volatility in the euro zone can be seen in the recent report that the unemployment rate in the region - 10.4 percent - is now at its highest level since the currency was introduced, according to Reuters.