By Deborah Levine and Sara Sjolin, MarketWatch
SAN FRANCISCO (MarketWatch) — The euro dropped to an almost two-month low against the dollar on Monday over renewed uncertainty about Greece’s next tranche of bailout money, while investors also remained cautious ahead of the U.S. presidential election.
The ICE dollar index DXY +0.26% , which measures the greenback against a basket of six currencies, rose to 80.772 from 80.600 in late North American trade on Friday.
The euro slumped EURUSD -0.2887% to $1.2786 from $1.2829. The shared currency hasn’t closed below $1.28 since Sept. 11, according to FactSet.
Worries over Greece weighed on the 17-nation shared currency ahead of a parliamentary vote on a round of tax hikes and budget cuts demanded by the country’s troika of international lenders — the European Central Bank, the European Commission and the International Monetary Fund. A failure to meet the requirements puts the next tranche of Greece’s bailout money at risk.
“Also, some traders sniff that the euro might now finally be headed lower after trading below the $1.28-$1.32 range that has contained the euro since mid-September,” said Michael Derks, chief strategist at FxPro, in emailed comments.
“That said, dollar bulls need to tread warily — an Obama victory will likely trigger some profit-taking on Wednesday by dollar longs,” he added.
On Tuesday, the U.S. presidential election is held, with polls showing a tight race between President Barack Obama and Mitt Romney. Official results will not be available until trading opens in Asia Wednesday.
U.S. economic data had little effect on trading. The dollar pared gains after the Institute for Supply Management’s index on the services sector of the U.S. economy fell to 54.1 in October from 55.5 in the prior month.
Among other currencies, the dollar fell to 80.23 against the Japanese yen USDJPY -0.2691% from ÂĄ80.40 Friday.
The British pound fell GBPUSD -0.2581% to $1.5968 from $1.6015.
The Australian dollar AUDUSD +0.2128% rose to $1.0355 from $1.0339.
Deborah Levine is a MarketWatch reporter, based in San Francisco.
Sara Sjolin is a MarketWatch reporter, based in London.
