* Euro hits 7-yr low vs British pound before Greek meetings
* Dollar at five-week high vs yen
* U.S. yields rise as Fed rate hike view strengthens (Updates prices, adds comment, developments on Greece)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 11 (Reuters) – The euro hit a seven-year low against the British pound and fell versus the dollar for a second straight session on Wednesday ahead of the outcome of a euro zone finance ministers’ meeting as the region and Greece edged closer to a showdown.
Any failure to find common ground on Greece’s debt burden will likely put more pressure on the euro.
Eurogroup Chairman Jeroen Dijsselbloem said on Wednesday ahead of the meeting that he did not expect an outcome from Greek talks, which weighed on the euro further.
“I think it’s going to be down to watching the headlines from the Eurogroup,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
The euro fell 0.1 percent to $ 1.1302 and was flat against the British pound at to 74.13 pence after hitting its lowest in seven years.
Greek Finance Minister Yanis Varoufakis began tense talks with euro zone finance ministers on Wednesday after the new leftist-led government won a parliamentary confidence vote for its refusal to extend an international bailout.
He said he was ready for a clash with euro zone officials over Greece’s decision to scrap austerity measures, end cooperation with various entities overseeing its bailout and demand a “haircut” for its debt burden.
The euro moved higher on Tuesday on optimism a compromise could be reached, which would be more acceptable to markets than Greece leaving the euro zone.
But it’s not all about Greece for the euro, which has moved within a 100-point range this week.
“Overstretched short positioning alongside what has been generally improving economic data out of the euro zone have put the breaks on downside momentum,” said Christopher Vecchio, a currency analyst at DailyFX.com, a division of FXCM in New York.
In other currency pairs, the dollar hit a five-week high against the yen, bolstered by a rise in Treasury yields. It was last at 120.23 yen, up 0.7 percent. Trade was thin, with Japanese markets closed for a public holiday.
The dollar was helped by a rise in the benchmark U.S. 10-year Treasury yield, which popped above 2 percent on Tuesday for the first time in a month on views the Federal Reserve might lift interest rates by mid-2015.
Richmond Fed President Jeffrey Lacker, an inflation hawk, said on Tuesday that a June hike was an “attractive option,” while San Francisco Fed President John Williams said economic conditions were “getting closer” to the point where it made sense to think about starting to normalize policy.
(Additional reporting by Anirban Nag in London; Editing by Jeffrey Benkoe)
- Politics & Government