A conservative victory on June 17 would raise the odds that Athens will form a government and agree to bailout terms by the European Union and the International Monetary Fund, enabling it to stay in the euro currency club.
The weekend news saw the euro jump 0.5 percent to $1.2575 , pulling away from Friday's $1.2495, its lowest level since July 2010.
But traders stayed pessimistic about the longevity of the move in the euro, as they continued to fret about the lack of growth in Europe and the fragile situation of its banks - concerns that conspired to drag the euro down 5 percent in May.
"Greek polls are certainly giving some respite to the euro, but we're still not even back to $1.26 and Spain looms large with its problems, so I wouldn't get overly excited about this rally," said Koji Fukaya, director of global foreign exchange research for Credit Suisse Securities in Tokyo.
Spain may recapitalise Bankia with Spanish government bonds in return for shares in the bank, which last week asked for rescue funding of 19 billion euros, a government source said on Sunday.
A sustained break of 1.25 would target the June 2010 low of $1.1876 with not much in the way of technical support this side of $1.2000. For now, traders cite the former support at 1.2625 as the nearest resistance level for the currency.
With the euro gaining some ground, the dollar index, which tracks its performance against a basket of major currencies, came off its highest level since September 2010, hit on Friday, to last stand at 82.150.
Against the yen, the greenback was 0.1 percent lower at 79.60 yen, with some traders stuck on the sidelines as U.S. markets stay closed on Monday for the Memorial Day holiday.
The Australian dollar also rose on the Greek news. It gained 0.5 percent to $0.9819, compared with around $0.9764 in late local trade on Friday. The bounce has pulled the Aussie further away from a six-month low of $0.9690 hit last week.
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