* Euro supported by Fed easing speculation
* Greece seen closer to agreeing coalition government
* Euro resistance at $1.2748, post-election high
The dollar fell for a second
straight session against the euro on Wednesday on speculation
the Federal Reserve will adopt further monetary stimulus to
boost the world's largest economy, although any decision by the
central bank to stand pat could spur a reversal.
The euro also gained support from signs Greek parties may be
close to forming a coalition government and expectations that
euro zone policymakers could take quick steps to lower borrowing
costs for Spain and Italy.
Strategists said the Fed's policy decision due later on
Wednesday, seen as likely to focus on action to lower long-term
interest rates on U.S. Treasuries, would take center stage.
In general, lower interest rates make a country's currency less
"The focus right now has been on the U.S. central bank and
the possibility that it may further stimulate the economy, so
that has helped put worries about Europe off to the side," said
Joe Manimbo, market analyst at Western Union Business Solutions
Fed officials will announce their policy decision at 12:30
p.m. (1630 GMT). They are due to release their economic
projections at 2 p.m. (1800 GMT). Fed chairman Ben Bernanke will
follow with a news conference at 2:15 p.m. (1815 GMT).
In midday New York trading, the euro was up 0.1
percent at $1.2706, not far from a one-month high of $1.2748 hit
on Monday after a narrow win for pro-bailout parties in the
Greek election. It held much of the gains made against the
dollar on Tuesday.
The euro was also supported by generally positive news out
of Greece. The leader of the winning New Democracy party Antonis
Samaras has been installed as prime minister of Greece and said
he can form a coalition government.
Constantine Ponticos, managing di
rector and head of research