The euro traded lower against the dollar Monday, after finishing higher last week, as the market worried that negotiations between Greek officials and the country’s creditors have yielded little progress.
The single currency EURUSD, -0.45% traded at $1.0717 in recent trade, compared with $1.0805 Friday.
With the economic calendar devoid of widely anticipated data, trading in the euro-dollar pair was primarily driven by worries about a Greece defaulting on its debt if an agreement isn’t reached by the end of the Eurogroup meeting on May 11.
“It appears that neither side wants Greece to exit the euro, but unless the EZ can structure some kind of a realistic debt forgiveness plan, it becomes just a matter of time before Greece will default on its obligations,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note to clients.
If Greece is forced to exit the euro, the fallout will be “unknown,” Schlossberg added.
Eurozone officials have said that it is unclear when Greece will run out of money.
Forex market participants were closely monitoring how Asian stocks respond to moves by China related to stock trading and monetary easing.
The People’s Bank of China, the country’s central bank, cut its reserve requirement on bank deposits to boost lending and spur economic growth.
The New Zealand NZDUSD, -0.16% and Australian dollars AUDUSD, -0.64% initially moved higher on the news, but had recently surrendered their gains in early New York trade.
The pound weakened against the dollar Monday, after rising for the past week and a half, as the market worried that no clear winner would emerge in U.K.’s May 7 general election.
“There is a large amount of political uncertainty connected with this election,” said Jane Foley, senior currency strategist at Rabobank in London.
The pound GBPUSD, -0.33% traded at $1.4907, compared with $1.4945 Friday.
