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Euro Rises Against Dollar as EU Seeks Acceptable Greek Path

•,Allison Bennett and Keith Jenkins

The euro strengthened against the dollar after a European Union official said a politically acceptable path will be sought for renegotiating Greece’s bailout conditions.

The U.S. currency fell against most of its major counterparts as the Federal Reserve starts a two-day meeting where 12 primary dealers expect some form of added stimulus from the central bank, while nine expect no action. The pound weakened versus the euro after U.K. inflation slowed in May to the least in 2 1/2 years. Mexico’s peso and Canada’s dollar rose after a report showed a measure of future construction in the U.S. climbed to the highest since September 2008.
“There is some temporary relief for the euro that the news out of Greece has been better, but nothing has really changed; we still see the euro at $1.20 in the second half of the year,”said Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New York. “A lot of people are expecting more easing from the Fed, so people want to be ready to take advantage of that.”

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