Euro skids versus dollar

The euro faltered on Monday after two days of gains, pressured by a German official's comment that a second Greek bailout was not yet certain, although belief that Greece will be able to avert default on its massive debt should limit the currency's losses.
Jean-Claude Juncker, chairman of the eurozone finance ministers, further fuelled selling in the euro in the afternoon session when he said the currency was overvalued. He made the comment before the European Parliament's economic committee in Strasbourg, France. Policymakers have inched toward a new bailout package for Greece that German media said could exceed 100 billion euros.
That helped push the euro to a one-month high of $1.46590 early in the session on trading platform EBS. But the euro slipped after a spokesman for the German finance ministry said a second aid program was not certain and after Juncker made his valuation remarks. The euro was last down 0.5 percent at $1.45650. Greece received a 110-billion-euro aid package a year ago. However, traders said the market expects to see a deal that gives Greece more time to repay its debt.
"We're seeing a bit of a corrective pullback in the euro after gains last week and in general the euro remains sensitive to headlines on Greece," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. Eurogroup chairman Juncker said as much on Monday, saying everything should be done to save Greece.
"The focus will turn toward interest rate differentials, and with the Federal Reserve unlikely to do anything this year, an ECB rate hike will pull money toward the euro and other currencies," said Boris Schlossberg, director of FX research at GFT Forex. "There's no reason whatsoever to own dollars now." For now, options barriers were stacked around $1.47000, traders said, with resistance also seen at $1.47100 - the 76.4 percent retracement of the euro's May decline.
Some currency portfolio managers have also shifted back toward a long euro position in the latest week, according to Quaesta Capital, a $3.5 billion fund of funds based in Zurich, Switzerland. The dollar hit a one-month low beneath 80 yen before rebounding to 80.130 yen, down about 0.2 percent. Asian sovereigns were said to be dollar buyers below the 80 level.
Commodity currencies also benefited from weakness in the greenback. The Australian dollar traded at US $1.0700, near Friday's 3-1/2-week high of US $1.0775. The dollar index dipped as low as 73.643 - a trough not seen since May 5. A recent spate of soft US data has raised concerns about the strength of the US economy. A report Friday showed a sharp slowdown in job creation, pushing the unemployment rate up to 9.1 percent.