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By Bloomberg

The euro held declines against most major peers this week before Greece’s parliament votes on reforms to qualify for a bailout plan the International Monetary Fund said fails to offer enough debt relief.

The 19-nation currency has fallen against all except one of 16 major counterparts this week as Greek Prime Minister Alexis Tsipras’s agreement to austerity measures sparked a revolt in his own party. A broad gauge of the dollar remained lower after U.S. retail sales fell in June, pushing back expectations for the Federal Reserve’s first interest-rate increase in almost a decade. The Aussie climbed against all its major peers after data showed Chinese growth outpaced economists’ forecasts in the second quarter.

“The likelihood of a short-term Grexit has declined,” said Todd Elmer, a Singapore-based strategist at Citigroup Inc., the world’s biggest currency trader. “That’s made the world a safer place to sell euros again.”

The single currency was little changed at $1.1005 as of 12:31 p.m. in Tokyo. It bought 135.85 yen from 135.84 in New York. The dollar was at 123.44 yen from 123.40 Tuesday.

Tsipras went on national television to argue for a deal that he only agreed to with “a knife on my neck.” His comments set up a day of parliamentary maneuvering that threatens to rupture his coalition. Still, opposition lawmakers are likely to back the package at a plenary vote scheduled for about 10 p.m. local time Wednesday.

‘Heavy Toll’

Bank closures and capital controls have exacted a “heavy toll” on Greece’s financial system and the economy, leading to a dramatic deterioration in the ability of the country to pay its debts, the IMF said in a preliminary debt-sustainability analysis released Tuesday.

“Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,” the IMF said in the analysis.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, was at 1,193.65 from 1,194.33 Tuesday, when it slid 0.2 percent.

Sales at U.S. retailers unexpectedly fell by 0.3 percent in June, a report showed Tuesday, compared with the 0.3 percent gain forecast by analysts surveyed by Bloomberg.

The Fed is likely to increase rates in about six months, according to a Morgan Stanley index, from as long as eight months last week, and as close as 5 1/2 months in mid-June.

Eyes on Yellen

The central bank has held its Fed funds target at virtually zero since December 2008 to bolster economic growth.

Fed Chair Janet Yellen will appear before Congress to give her semi-annual monetary policy testimony Wednesday and Thursday.

Kansas City Fed President Esther George said Tuesday it’s time for the central bank to raise rates.

There’s a “slightly more hawkish tone that we’ve heard from Fed speakers as of late,” said Citigroup’s Elmer. “We are starting to see some drift forward in terms of the expected timing of the first interest rate hike, and this is translating to dollar appreciation.”

By contrast, the Bank of Japan refrained from adding to already unprecedented stimulus at a policy meeting that ended Wednesday. The central bank cut its core consumer price index target to 0.7 percent for the current fiscal year from 0.8 percent it forecast in April.

“The BOJ lowered CPI and growth forecasts slightly, spurring limited yen selling because the bank could eventually take more action,” said Yuji Saito, executive director of foreign exchange at Credit Agricole SA in Tokyo wrote in an instant message. “There is no incentive to buy the yen.”

Aussie Rises

The Aussie rose from near a six-year low versus the greenback, advancing 0.3 percent to 74.73 U.S. cents.

China’s gross domestic product rose 7 percent in the second quarter from a year earlier, the National Bureau of Statistics said, unchanged from the first quarter and beating economists estimates for 6.8 percent. Separate reports showed retail sales and industrial production in June also topped analyst estimates.

“Certainly the data does allay some of the China concerns, especially in recent days amid the stock market rout,” and that has lifted the Australian dollar, said Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong. “The People’s Bank of China will do whatever it takes to maintain that 7 percent growth target.”