* Euro steadies after slip on cut in French rating
* Euro zone finance ministers meet to discuss Greek aid
* Yen near seven-month low after BOJ holds policy
By Nia Williams
LONDON, Nov 20 The euro held steady against the
dollar on Tuesday as cautious optimism that euro zone ministers
would release funds to debt-ridden Greece offset a cut in
France's credit rating.
Finance ministers meet later in the day to discuss unlocking
delayed aid payments to Greece, a day after Athens passed laws
to enforce budget targets and appease foreign lenders.
Signs that Greece seemed to be on track to receive the
funding supported demand for the euro, which pared earlier
losses after ratings firm Moody's stripped France of its
triple-A status late on Monday.
Analysts said the cut did not come as a surprise after
Standard & Poor's downgraded France in January, and the finance
ministers meeting could have a bigger impact on the euro if
policymakers fail to meet market expectations.
"Although we know Greece's problems will not be resolved
today many people would like to put this particular part of the
issue to bed, and there's no guarantee of that," said Jane
Foley, senior currency strategist at Rabobank.
"If this does drag on beyond today there's scope for it to
cause some disappointment for the euro."
The single currency was close to flat on the day at
Strategists said failure to reach an agreement could see the
euro give up its gains of recent days and fall back below $1.28,
targeting the Nov. 13 low of $1.2661.
Some investors were wary after Finland's finance minister
said she was unsure Greece's next loan trance would be approved
at the meeting.
YEN WEAKNESS PERSISTS
The dollar dipped 0.2 percent to 81.21 yen but held
close to a seven-month high of 81.59 yen hit on Monday amid
mounting political calls for more aggressive monetary expansion.
The yen showed limited reaction after the Bank of Japan held
off from additional monetary stimulus, as expected, after having
eased policy in September and October.
The yen has slid over the past week on market expectations
that a likely new Japanese government after a Dec. 16 election
would push the BOJ toward more forceful monetary stimulus.
Analysts said the dollar may have more room to rise against
the Japanese currency in the near term.
"I think we are going to see new highs," said Todd Elmer,
currency strategist at Citi in Singapore, referring to the
dollar's outlook versus the yen. "We are going to break out of
the topside of the range around 82. The risk is that we could
extend a little beyond that point."
Shinzo Abe, the leader Japan's opposition Liberal Democratic
Party (LDP), has called on the BOJ for bolder policy action,
including "unlimited easing", pushing interest rates to zero or
below and directly underwriting bonds issued to fund public
The Nikkei newspaper reported that the LDP was likely to
include in its campaign platform a pledge to consider revising a
law guaranteeing central bank independence.
The euro also pulled back after hitting four-week high of
104.29 yen on Monday, and was last down 0.4 percent at 103.87