Euro tumbles in London

The euro fell on Monday on mounting investor concern that Greek coalition parties had yet to sign off on the terms of a new bailout, keeping alive the risk of a messy default that could ensnare other countries such as Portugal. Greece's coalition members must agree to painful terms of a new bailout worth 130 billion euros before euro zone finance ministers next meet, with a Greek government official denying that there was a deadline for the parties to respond to.
A spokesman of the PASOK socialist party which is a coalition partner, said on Sunday that leaders of the three parties had to give their responses by 1000 GMT on Monday. So far there appears some distance between the Greeks and the targets proposed by the IMF-EU-ECB troika with concerns rising that Athens might be opposed to more austerity measures like labour reforms and wage cuts.
If there is no resolution to the impasse, some traders say the euro could fall below $1.30 in the near term. "Deadline or no deadline, I am not surprised," said Jeremy Stretch, head of currency strategy at CIBC World Markets, who expected these deadlines to be flexible. "Already the euro has moved a fair bit lower this morning and a lack of movement on the Greek deal will perhaps see it grinding below $1.30."
The single currency was down 0.8 percent at $1.3036, tripping stops below $1.3050 as it dropped to $1.3030 on trading platform EBS. Near term support lies at $1.3023 - its February 1 trough- and more stops cited below $1.3020 with investors like macro funds looking to sell above $1.3100.
Against the yen, the euro fell 0.7 percent to 99.88 yen while against the safe-haven Swiss franc, the common currency was 0.1 percent lower at 1.2060 francs. The Swiss central bank caps the strength of the franc at 1.20 per euro. Still, the fact that euro was holding above $1.30 supported a view that Athens and the "troika" of lenders will clinch a last minute deal. That could give the euro a short term boost, although many investors could use the bounce into $1.32 to initiate fresh bearish positions, traders said.
The Australian dollar slipped from a six-month high hit on Friday after surprisingly soft Australian retail sales data kept alive expectations of a rate cut by the Australian central bank on Tuesday. The Aussie fell 0.7 percent to $1.0695, slipping from a six-month high of $1.0794 on Friday.