Euro climbs on Greek bailout hopes

The euro climbed to a two-week high against the dollar on Friday morning, driven by hopes about Greece's chances of securing additional bailout funding.

Early London trading saw the single currency rise to $1.0880, an increase of 0.4 per cent on the day, with the dollar hampered by disappointing US economic data. 

The number of US citizens filing new unemployment claims rose for a third week in a row last week, while a separate report revealed an 11.4 per cent drop in sales of new homes in March.

German chancellor Angela Merkel bolstered the euro by stressing on Thursday that all steps should be taken to stop Greece from running out of money and defaulting on its debts. "Everything must be undertaken to prevent that," she was quoted by Reuters as saying.

Ms Merkel said talks with Greek prime minister Alexis Tsipras had been "constructive", although she declined to give any details about what the two had discussed.

For his part, Mr Tsipras told reporters that significant progress has been made, adding: "We have covered a large part of the distance."

The Greek leader said he was feeling very positive about the negotiations and claimed a deal to unlock extra funding for the country had moved closer, while a Greek official told Reuters there had been "convergence" on a number of issues - including a reduced budget surplus target.

However, it appears there is still some distance to go before a conclusive agreement can be reached. 

Citing unnamed EU officials, Reuters said there are still wide differences between the two parties on a range of issues, including labour market reforms, public finances and the pension system.

Progress on the talks will be discussed by eurozone finance ministers at a meeting in Riga today.