Euro slides in New York

The euro slipped to a more than one-week low against the dollar on Wednesday and fell against the yen, after earlier hitting a two-month peak, as euro zone officials considered ways to delay a second bailout package for Greece while still avoiding a chaotic debt default.
European Union sources said the delay could last until after Greece holds elections in April, though there are options being considered that would still let Greece meet a 14.5 billion euro bond redemption payment due on March 20. The news triggered stop-loss sell orders on the break of $1.31 in euro/dollar and below 102.82 yen in euro/yen.
As the rhetoric ramped up, a visibly angry Greek President Karolos Papoulias accused German Finance Minister Wolfgang Schaeuble of insulting his nation, reflecting growing public resentment of almost daily lectures from Berlin on the dire state of the Greek economy. Later, Greek Finance Minister Evangelos Venizelos said Greece could announce a debt swap scheme with private bondholders on Monday if euro zone ministers at a meeting that day sign off on an overall rescue package.
"Europe and Greece are playing a game of chicken, and unfortunately their mutual unwillingness to back down this close to the March 20 deadline means that default may be unavoidable," said Kathy Lien, director of FX research at GFT in Jersey City, New Jersey. "In fact, the refusal of euro area countries to unlock bailout funds is a sign that they have become more willing to let Greece default."
In early afternoon New York trade, the euro was down 0.3 percent at $1.3072, according to Reuters data. At one point the euro fell to its lowest level since February 6 at $1.3043. Traders cited key support around $1.3025, near the lows of February 1 and February 6, with psychological support still at the $1.30 level.
Goldman Sachs said in a research note it closed its long euro/dollar trade as "the next few weeks will see significant uncertainties" linked to the implementation of the Greek rescue package. The bank added that near-term volatility could pick up. Against the yen, the euro fell from roughly two-month highs after the Greek news, and hit session lows at 102.17, using Reuters data. Hedge funds were reportedly sellers of euros versus the Japanese currency. The euro was last at 102.42 yen, down 0.5 percent.
The dollar slipped against the yen to trade 0.2 percent lower at 78.33. Monetary easing steps from the Bank of Japan on Tuesday had weighed on the Japanese currency and earlier pushed the dollar to a 3-1/2-month high. The risk-correlated Australian dollar, meanwhile, rose 0.2 percent to US $1.0693. The New Zealand dollar was up 0.3 percent at US $0.8338 after earlier climbing to its highest level since September.