LONDON—The euro fell Monday alongside equities as worries about a Greek debt default intensified after a weekend meeting of euro-zone finance ministers failed to impress.
The common currency traded recently at $1.3656 compared with $1.3798 late Friday in New York, and at ¥104.78 compared with ¥105.91. The pound slipped to $1.5731 from $1.5788, while the dollar was at ¥76.73 form ¥76.82. The ICE Dollar index, which tracks the greenback against a basket of currencies, rose to 77.122 from 76.552.
The euro sank at the start of Asian hours after the Greek government received fresh warnings that it may not get the next €8 billion tranche of aid under a bailout agreement unless its budget goals are met, raising concerns that a Greek default might be nigh.
"Investors are concerned that the additional policy steps needed may not be agreed on time. In turn, fears that Greece could run out of money in coming weeks continue to weigh on euro sentiment," Citigroup said in a note to clients.
Without more aid, Greece is in danger of running out of money by mid-October. The country is due to make bond-coupon payments totalling €750 million Tuesday.
The single currency extended its losses in European trade but then stabilized as attention turned to a teleconference call between a troika of international experts and Greek officials due later Monday to review Greece's progress in meeting stringent budget goals.
"If Greece decides today that they are willing to speed up [deficit-reduction measures], then the troika officials would likely return to Greece this week," said TD Securities. "If Greece decides that they are not willing to go forward with these measures, they will have no choice [but] to default as they simply don't have the cash to make it past mid-October."
The announcement that the teleconference call had been pushed back by three hours whacked the euro to the day's low against the dollar at $1.3634, although nagging uncertainties related to U.S. policy kept the losses in check.
"We are going lower from here, although I don't think we will go too far down ahead of the Fed's meeting [Wednesday]," said Daragh Maher, a currency strategist at Crédit Agricole in London. "I think the $1.35 level will be the key focus."
Investors expect the Federal Reserve to announce some form of further monetary-policy easing at the Federal Open Market Committee meeting on Wednesday.
In earlier Asian trade, the Singapore dollar and Korean won were notable fallers against the dollar as investors piled out of relatively risky currencies, fearing the worst for the euro zone and wider global economy.
The Hungarian forint and South African rand were also punished. The rand fell to its lowest level against the dollar since July 2010, while the forint hit its lowest level since July 2010 against the euro.
