* Euro pops up overnight on hopes for Greek deal breakthrough
* Dollar awaits U.S. data later in the day for next incentive
* Fed, BOJ meetings later this week next event risks (Adds details, quotes)
By Ian Chua and Shinichi Saoshiro
SYDNEY/TOKYO, April 28 (Reuters) – The euro hovered near a three-week peak on Tuesday, having pushed higher overnight as the dollar came under broad pressure and on renewed hopes that cash-strapped Greece was a step closer to securing fresh funding.
The dollar awaited U.S. data later in the day which could either hasten its fall against the euro or arrest its decline ahead of the closely-watched two-day Federal Reserve meeting that begins Wednesday.
The S&P/Case Shiller housing index and consumer confidence data will provide a glimpse into the state of the U.S. economy, which is yet to gain full momentum and has doused market expectations for an interest rate hike by the Federal Reserve in June.
The euro climbed as far as $ 1.0927 and last stood at $ 1.0877. It is nearing the top-end of a $ 1.0457-$ 1.1062 range since hitting a 12-year trough in mid-March.
Greek Prime Minister Alexis Tsipras on Monday reshuffled his team handling talks with European and IMF lenders, a move widely seen as an effort to relegate embattled Finance Minister Yanis Varoufakis to a less active role in negotiations.
“Varoufakis’ hard-ball tactics have been a source of huge frustration for the Brussels group of international creditors,” said Ray Attrill, global co-head of FX strategy at NAB.
“The appointment of a more conventional negotiator, more familiar with the European bureaucracy, has stoked optimism that a deal will be reached before large payments are due in May.”
Nevertheless, the situation still remained murky with Greek Prime Minister Tsipras also saying the government’s top priority as it faces depleting cash coffers was to pay wages and pensions, subsequently adding that defaulting on debt was not an option either.
“The market has become used to potentially negative Greek headlines and less responsive to them. It will give more attention when payment deadlines loom closer or should Greece actually have a difficult time making payments,” said Shinichiro Kadota, chief Japan FX strategist at Barclays in Tokyo.
Greece faces a Eurogroup meeting of euro zone finance ministers on May 11, a day before it must pay 700 million euros to the IMF.
The dollar was little changed at 119.095 yen briefly touching 119.44 overnight in a knee-jerk reaction to Fitch downgrading Japan’s credit rating by one notch to A, five notches below the top AAA rating.
The impact was short-lived as the downgrade was well anticipated, the yen having taken past rating cuts in stride. The Bank of Japan’s monetary policy meeting on Thursday loomed as a possible risk event.
Against the yen, the common currency was at 129.59 , having come just short of 130.00 overnight.
The firmer euro helped knock the dollar index to a three-week low of 96.467. The index last traded at 96.798, little changed on the day.
Commodity currencies were among the best performers, further underpinned by gains in commodity prices.
With oil near its 2015 peak, the Canadian dollar touched a three-month high of C$ 1.2080 per USD. It was last at C$ 1.2101.
Its Australian peer scaled a near five-week peak of $ 0.7873 , before drifting off slightly to $ 0.7870.
There was nothing in a speech by Reserve Bank of Australia Governor Glenn Stevens that moved the Aussie. Stevens said he would not comment on monetary policy given the next rate meeting was only a week away.
Investors are in two minds whether or not the RBA will cut the 2.25 percent cash rate at the May 5 meeting. (Editing by Richard Pullin and Simon Cameron-Moore)
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