The euro hit a three-week high against the dollar on Tuesday on a belief that Greece may avoid a debt restructuring, but further gains will likely be capped by technical resistance, with the currency poised to end the month significantly weaker.
While the euro rallied last week on bets that Greece should be able to shoulder its heavy debt burden without restructuring, the currency shared by 17 nations is still down around 2.9 percent in May, its worst monthly performance since November.
The euro had earlier risen to $1.4425 according to electronic trading platform EBS. In late morning New York trading, the euro was up 0.8 percent at $1.4386, below resistance at $1.4454, the 50 percent retracement of this month's fall from nearly $1.50. Above that lay the 61.8 percent retracement of the same move at $1.4568.
The dollar index, which tracks the greenback against a basket of currencies, traded 0.4 percent lower at 74.656. It is up about 2.3 percent in May, its best monthly performance since December. The dollar was up 0.1 percent against the Swiss franc at 0.8524 francs, hovering near a record low of 0.8457 hit on Monday. The New Zealand dollar jumped 1 percent to $0.8264, a fresh post-float high. The dollar was last at 81.30 yen, up 0.4 percent on the day.
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