Euro up on Greek hopes, stocks dip

New York - The euro rose on Tuesday on news the text of a bailout agreement could be reached later in the day in Greece, while weak earnings from banking giant UBS pressured financial stocks.

US stocks opened lower ahead of Senate testimony from Federal Reserve Chairman Ben Bernanke that may grab the spotlight at 15:00 GMT after last week’s strong jobs data.

Greece’s government is preparing the text of an agreement on a 130 billion euro bailout that must be put to political leaders for approval, a Greek government official said, suggesting Athens had largely wrapped up talks with lenders on the rescue.

“The Greek news removes a hurdle ... in the short term and eases the massive credit risk and that’s positive for the euro,” said Boris Schlossberg, director for currency research at GFT in Jersey City.

The euro jumped 0.4% to $1.3183, tracking below a six-week high of $1.3235 hit at the end of January.

The single currency was also underpinned by short covering. Bets by foreign exchange traders that the single currency would fall have been running a record levels according to data from the U.S. Commodity Futures Trading Commission, although the positions were trimmed slightly in the latest week.

European stocks, which have risen sharply in the year, fell back as a weak earnings update from Swiss bank UBS signaled the debt crisis will wreak further damage on the banking sector.

The FTSEurofirst 300 index of top European shares was down 0.65%. US stocks opened lower, with financial shares among the top decliners. The KBW capital markets index fell 0.8 percent.

The Dow Jones industrial average fell 34.25 points, or 0.27%, to 12 810.88. The S&P 500 Index dropped 4.71 points, or 0.35%, to 1 339.62. The Nasdaq Composite lost 9.65 points, or 0.33%, to 2 892.34.

Global stocks were slightly lower, having gained about 8 percent already in 2012.