Dollar gains as Greek talks weigh on euro

[NEW YORK] The dollar gained against the euro Thursday as talks between Greece and the eurozone on bailout terms hit another snag.

Germany rejected Athens's request for a six-month extension of its EU loan program without austerity reforms attached.

However, German Chancellor Angela Merkel held talks with Greek Prime Minister Alexis Tsipras by telephone for nearly an hour on Thursday in a "positive climate," a Greek government source said.

Finance ministers from the 19-member eurozone will hold a crunch meeting in Brussels on Friday to consider the proposal by Athens to extend its European loan program that expires at the end of the month.

Traders began to look past US Federal Reserve minutes released Wednesday that had weighed on the dollar. The minutes of the January 27-28 policy meeting portrayed a central bank more dovish on interest rates than thought.

The greenback also rose against the Japanese yen and the British pound.

"For now, the minutes were not likely cautious enough to meaningfully dampen expectations for a mid-year rate hike by the Fed," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

"The dovish Fed minutes clouded the near-term outlook for the dollar," Joe Manimbo, senior market analyst at Western Union Business Solutions.

"But its longer run prospects remain bullish on account of America's positive fundamentals which still have the Fed on course to boost interest rates this year."

AFP