Greece tells France, Germany committed to bailout obligations; boost for euro

Greece told France and Germany on Wednesday it was determined to meet all obligations agreed with international lenders in exchange for an EU/IMF bailout.
"Despite recent rumours, all parties stressed Greece will remain in the euro zone," Greek government spokesman Ilias Mossialos said in a statement following a 25-minute telephone call between French President Nicolas Sarkozy, German Chancellor Angela Merkel and Greek Prime Minister George Papandreou.
The euro held most of its gains against the dollar after jumping on Wednesday, when Germany and France voiced their commitment to keeping debt-ladened Greece in the euro zone.
The euro jumped to a three-day peak of $1.3873 after the call between the leaders of France, Germany and Greece which boosted confidence that Athens will received the next tranche of aid from the European Union and IMF and avoid imminent default.
The single currency's recovery was further helped after European Commission President Jose Manuel Barroso flagged plans to present options soon for the introduction of common euro bonds. The project, however, is likely to meet stiff resistance from Germany.
The single currency was steady on Thursday around $1.3735 , although most strategists believe its trend remains downwards, with only short-term solutions to the crisis on the table for now.
"Nothing has changed. Greece is still highly likely to have to do more restructuring," said Joseph Capurso, currency strategist at Commonwealth Bank of Australia. He expected the euro to slip to as far as $1.3640 by the end of the week.
European shares were set to rise on Thursday, mirroring gains on Wall Street and in Asia, After French and German leaders projected words of unity and support for Greece, easing fears of an imminent Greek debt default.
But traders remained sceptical about the upward movement in European stocks, which are likely to advance for a third straight session after hitting a two-year low this week.
"Given the fact that we are not seeing much more than rhetoric at the moment, many people are still expecting Greece to default and see the move up as nothing more than a relief rally," said Zahid Mahmood, trader at Capital Spreads.