Euro dips in New York

The euro dropped against the dollar on Monday as Greece's political leaders delayed a decision on a new bailout package, raising concerns of a disorderly default that could spread to other debt-ridden countries in the region. A European Commission spokesman said Greece was already past the deadline for finalising talks on a second financing package and needed to move urgently.
German Chancellor Angela Merkel told Greece to make up its mind quickly on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day. "Headlines out of Europe are affecting sentiment on the euro. Earlier, we had hit stop losses in the euro and we saw it trim some losses. But it's more of the same," said Brian Dolan, chief currency strategist at Forex.com, as investors waited on Greece.
The euro was last down 0.1 percent at $1.3128 after hitting a low of $1.3026 after stop-loss orders were tripped below $1.3050. If the impasse in Greece persists, the euro could target $1.3026, the February 1 trough, and more stop-loss orders were said to be below $1.3020.
Nomura Securities analysts said they believe a Greece deal is close, both in terms of the private sector involvement process and in relation to negotiations with its lenders around key program parameters. "Since the implications of bad versus good news is clearly asymmetric (a bad outcome could have severe implications), it is a tough set-up to trade with confidence," Nomura said. "Nevertheless, we believe a 'good' outcome is likely in the very short term. We are therefore inclined to keep a risk constructive bias within our portfolio at this time."
The IMF's chief economist, Olivier Blanchard, said on Monday it looks like the "haircut" on Greek private debt will be "very large" as negotiations between bondholders and the government drag on. CitiFX, a division of Citigroup, said even with all the uncertainty about Greece, the euro has still managed to hold its ground pretty well. Against the yen, the euro fell 0.1 percent to 100.54 yen while against the safe-haven Swiss franc, it was 0.1 percent lower at 1.2062 francs, not far from the Swiss central bank's cap at 1.20 francs per euro. The dollar was little changed against the yen at 76.58 yen, having earlier risen to 76.79 yen, its highest in over a week.