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The euro pared losses in volatile trade on Tuesday on a media report, later denied, that heavily indebted Greece could agree a new rescue deal next month to help it meet its funding requirements in the next two years.
The euro rose after Dow Jones quoted a senior Greek official as saying that a new deal could be struck as early as June.
It later fell back after Greece denied it was discussing a new package and a German MP questioned whether Greece had met the terms for its next aid tranche.
"This seems a bit early to come up with something concrete. I think we'll get more posturing before a deal can be agreed on Greece," said Gavin Friend, currency strategist at nabCapital.
Greece must follow the steps laid down in its budget adjustment programme before any additional loans can be considered, European Central Bank Executive Board member Lorenzo Bini Smaghi said on Tuesday.
Asked about the possibility of a new loan being extended to Greece, Bini Smaghi said the Athens government had to press on with what had already been agreed.
On Monday, Standard and Poor's cut Greece's rating to B from BB-, dragging it further into junk territory.
"We need a fresh trigger to go lower in the euro from here. I think we're in a $1.43/1.46 range for now," said Geoffrey Yu, currency strategist at UBS.
Recent weakness in the euro, initially triggered by disappointment over a lack of hints on a rate hike next month from the European Central bank last week, accelerated as panic selling in the commodities market prompted investors to shun risk.
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