The dollar was stuck in neutral for a second day in a row on Tuesday, unable to extend its comeback bid against the euro. The dollar’s main rival was supported by news that Greece may work out a new financial aid package.
According to the Wall Street Journal, Athens is lining up 60 billion euros ($86.11 billion) to meet its obligations through 2013.
The buck had been gaining ground over the past few session amid concerns that Greece may be forced to restructure its debt.
However, European Central Bank officials have vigorously denied that a Greek restructuring is in the cards.
An ordered restructuring is “pure fiction,” European Central Bank Executive Board member Lorenzo Bini Smagh told an Italian newspaper today.
The dollar held near $1.4350 versus the euro, staying well away from a 17-month low near $1.50 set last week.
In additional to alleviated concerns about Greece, a slower rise in U.S. import prices may have weighed on the dollar today.
The dollar wobbled near Y80.75 versus the yen compared to 80.20 last night. Against the sterling, the buck was steady near $1.6330.
In economic news, U.S. import prices increased 2.2 percent for a seventh straight month of gains, the Labor Department said, slowing from a 2.6 percent increase in March.
The slower pace may support the Fed’s view that the effects of soaring energy prices will prove temporary. This would give the Fed room to keep interest rates on hold near zero through 2011.
Merchant wholesalers increased both inventories and sales in March, according to figures released Tuesday by the Department of Commerce. The report showed that wholesale inventories increased by 1.1 percent in March following a 1.0 percent increase in February.
Economists had expected inventories to rise by 1.0 percent. With the bigger than expected monthly increase, wholesale inventories rose to their highest level since November of 2008.
The June completion of the Federal Reserve’s $600 billion quantitative easing program should represent the peak of monetary stimulus, a top official at the Fed said Tuesday.
“Barring significant unexpected developments, this should be the high-water mark for monetary stimulus in this cycle, with the focus going forward on the timing and pace of stimulus withdrawal,” said Richmond Fed President Jeffrey Lacker.
