The euro fell versus the dollar and yen amid concern Greece will default on its debt and as finance ministers from the region prepared to meet in Latvia to persuade the nation to commit to economic reforms.
The single currency weakened versus 12 of its 16 major counterparts as a Bloomberg survey of economists put the odds of a Greek default at 40 percent. Greek Prime Minister Alexis Tsipras on Thursday urged an acceleration of talks with creditors to strike a deal by the end of this month. The New Zealand dollar slid for a third day.
“Things have been delayed on an ongoing basis and I wouldn’t be surprised if we don’t get much clarity out in the short run” on Greece, Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at UBS’s wealth-management unit in Hong Kong, said in a Bloomberg Television interview with Rishaad Salamat. “There’s still a good chance that we’re going to hit parity” for the euro against the dollar, he said.
The shared currency weakened 0.1 percent to $1.0812 as of 6:51 a.m. in London, extending this year’s decline to 11 percent. The euro dropped 0.2 percent to 129.22 yen.
The probability Greece will miss some of its debt payments in the coming weeks is 40 percent, while the chance it will exit the 19-nation currency bloc is 30 percent, according to median estimates in the Bloomberg survey of 29 economists. Almost four in five said a default won’t trigger an exit.
The country’s departure from the euro is now likely enough that officials from the euro area act as if they have come to terms with such an outcome, according to Martin Sorrell, chief executive officer of WPP Plc.
“The odds have moved closer to them going” and it’s “not a given, but more than 50-50,” Sorrell told Francine Lacqua in a Bloomberg Television interview on Thursday, citing discussions on a visit to Brussels last week.
The meeting of the euro-area finance ministers in the Latvian capital of Riga on Friday follows a European Union leaders summit in Brussels attended by Tsipras.
The euro has slumped 7.6 percent this year, the worst performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 4.7 percent and the yen rose 5 percent.
New Zealand’s dollar slid 0.4 percent to 75.62 U.S. cents, extending its three-day decline to 1.4 percent.
The kiwi tumbled as much as 1.7 percent Thursday after Reserve Bank of New Zealand Assistant Governor John McDermott said monetary policy will remain stimulatory.