Forex - EUR/USD rebounds from 7-day low as risk aversion wanes

Forex Pros – The euro erased losses against the U.S. dollar on Monday, rebounding from a seven-day low as risk aversion waned ahead of a key Greek vote on an austerity plan which must pass in order to secure more international financial assistance.

EUR/USD clawed back up from 1.4103, the pair’s lowest since June 16 to hit 1.4222 during European late morning trade, rising 0.24%.

The pair was likely to find support at 1.4067, the low of May 5 and resistance at 1.4305, Friday’s high.

Greek Prime Minister George Papandreou needs to secure parliamentary approval for a EUR28.4 billion, five-year austerity package on Wednesday, in order to access a EUR12 billion bailout from the European Union and the International Monetary Fund.

If the plan is not passed, it could result in the euro zone’s first sovereign debt default, as Greece needs to cover EUR6.6 billion of bonds maturing in August.

On Sunday, Greece's deputy Prime Minister Theodoros Pangalos warned that the Greek parliament may block some of the economic reforms, but added that lawmakers will probably approve an overall austerity package to stave off a default.

The euro also inched higher against the pound, with EUR/GBP easing up 0.03% to hit 0.8894.

Later Monday, the U.S. was to publish official data on personal earnings and expenditure as well as data on the consumer price index.

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