Euro climbs past 1.40 dollars

In morning London trade, the single currency increased to 1.4010 dollars from 1.3959 dollars in New York late on Tuesday.

LONDON, February 3, 2010 (AFP) - The European single currency breached 1.40 dollars on Wednesday as investors hoped for progress on Greece's financial troubles, dealers said.

In morning London trade, the single currency increased to 1.4010 dollars from 1.3959 dollars in New York late on Tuesday.

Against the Japanese unit, the dollar eased to 90.38 yen from 90.39 late Tuesday.

The European Commission meanwhile approved the Greek government's plans to rein in its "excessively high" public deficit.

"Greece is back in the spotlight," said Neil MacKinnon, global macroeconomics strategist at Russian investment bank VTB Capital in London.

"Greece might well avoid a formal default but the government's deficit reduction plans look over-ambitious.

"An EU 'bail-out' remains on the cards given the lack of credibility surrounding Greek budget plans. Wider contagion risk within the eurozone remains a key threat," he said.

In recent days, the euro has been dogged by mounting concerns about soaring public debt in eurozone members Greece and Portugal and last week it struck a six-month low under 1.39 dollars.

Greece is struggling under a massive debt of over 294 billion euros (412 billion dollars), a runaway public deficit estimated at 12.7 percent of output, a triple downgrade of its sovereign debt ratings and doubts over suspect data.

That came after the EU last year placed Greece under an "excessive deficit procedure" and has complained of systemic failures and weaknesses as well as unreliable reporting of budgetary statistics.

The proposed Greek measures are aimed at reducing the deficit to 8.7 percent of GDP this year and then to under the EU's three percent bar in 2012 via a series of austerity measures.

In London on Wednesday, the euro was changing hands at 1.4010 dollars against 1.3959 dollars late on Tuesday, at 126.63 yen (126.17), 0.8743 pounds (0.8739) and 1.4731 Swiss francs (1.4728).

The dollar stood at 90.38 yen (90.39) and 1.0514 Swiss francs (1.0549).

The pound was at 1.6022 dollars (1.5968).

On the London Bullion Market, the price of gold rose to 1,121.07 dollars an ounce from 1,111 dollars an ounce late on Tuesday.