Today the euro remained more stable, after slipping the day before when the European Central Bank said it will no longer accept Greek bonds as collateral for its liquidity operations.
While Athens are seeking debt relief from euro zone lenders, the ECB's announcement dealt a blow to the country, knocking the euro to $1.1304 earlier on Thursday.
The euro later regained some ground to trade near $1.1353 EUR/USD , up 0.1 percent from late U.S. trade on Wednesday. The single currency still remains well below a high of $1.1534 set on Tuesday during a short-covering rally.
Late on Wednesday markets were surprised after ECB announced it would reimpose minimum credit rating requirements for Greek bonds, effectively shifting the burden on to the Greek central bank to finance its lenders, says Reuters. The announcement came after Greece's new finance minister Yanis Varoufakis emerged from a meeting with ECB President Mario Draghi to claim that the ECB would do "whatever it takes" to support member states such as Greece.
CitiFX strategist Richard Cochinos commented the shift in the ECB's program will be seen by markets as indicating that the meeting between Varoufakis and Draghi did not go well.
The common currency last traded at 133.18 yen EUR/JPY, up 0.1 percent on the day but well below a near two-week high of 135.35 yen that had been set on Wednesday.
Some market participants said they viewed worries about Greece as a short-term trading factor rather than a trigger for protracted euro weakness, citing hopes for an eventual compromise between Greece and international lenders.
"I think the market consensus is that Greece will back down in the end," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.
The euro will probably trade roughly between $1.12 to $1.15 until around March, Murata said.
The dollar held steady at 117.29 yen USD/JPY , remaining well within a 116.00-119.00 range seen in the past few weeks.
The Australian dollar rose 0.3 percent to $0.7773, edging away from a six-year trough of $0.7627 set earlier in the week.
