Euro Falls for First Time in 3 Days as Greece Standoff Worsens

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The euro fell for the first time in three days against the dollar as concern grew that time is running out for Greece to secure a bailout.

The 19-nation currency weakened versus most of its major peers after Prime Minister Alexis Tsipras hurled criticism at Greece’s creditors, accusing the International Monetary Fund of “criminal” responsibility for his country’s predicament. The euro pared a monthly gain as the next focus is on the meeting of euro-area finance ministers on June 18.

“The reaction in the currencies market to the development of Greek negotiations has been restrained,” Sireen Harajli, a strategist at Mizuho Bank Ltd. in New York, said by phone. “The market has a lot of confidence a deal will be reached last minute.”

The euro dropped 0.3 percent to $1.1246 as of 5 p.m. New York time. The currency is up 2.4 percent this month, and has rebounded about 7 percent from a 12-year low reached three months ago. It declined 0.4 percent to 138.74 yen.

The dollar was little changed at 123.36 yen. Federal Reserve Chair Janet Yellen and her policy-making committee will conclude a two-day meeting Wednesday.

Greek Discussion

The European Central Bank insists on tactics that strangle Greece, and the economy has been asphyxiating over the past few months, Tsipras told lawmakers from his Syriza party on Tuesday.

German Chancellor Angela Merkel, speaking in Berlin at the same time as Tsipras, struck a more conciliatory tone. While she “unfortunately” saw little new to report on Greece, Merkel said she’ll “do everything possible to keep Greece in the euro zone.”

With two weeks until Greece’s euro-area bailout expires on June 30, the onus on resolving the deadlock lies with the Thursday meeting followed by a June 25-26 summit of European Union leaders.

The Greek impasse hasn’t deterred the euro from rallying this month. The single currency is trading higher than its 50-and 100-day moving averages on optimism the region’s falling inflation rate has reached a bottom and economic growth is gathering steam.

“A final collapse in negotiations on Thursday, and subsequent capital controls are still most likely to see the euro trade lower,” Jens Nordvig, managing director of currency research at Nomura Holdings Inc. in New York, said in an e-mail. “Markets still pay attention to Greece, but the effects are of magnitudes smaller than during the euro crisis from 2010 to 2012.”

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