Euro under pressure over Greece worries

The euro dipped Monday on fears about a Greek default, as tense talks between Athens and its international creditors lumber along with no breakthrough in sight.

In Tokyo, the euro slipped to $1.0800 and 128.38 yen from $1.0810 and 128.49 yen in New York, AFP reported.

The dollar fetched 118.87 yen, against 118.86 yen in US trade but down from 119.00 yen in Tokyo earlier Friday.

At the weekend, both the ECB’s Draghi and IMF Managing Director Christine Lagarde warned at IMF-World Bank spring meetings in Washington that Greece has not provided enough information about how its economic and reform plans will impact its finances.

With Greece seeking the release of another 7.2 billion euros in bailout funds from the European Union, Draghi cautioned that not reaching an agreement would take the situation into “uncharted waters”.

He and Lagarde said that however the new leftist Greek government of Alexis Tsipras wanted to adjust policies under the country’s massive bailout, it still needed to demonstrate the effect on the budget and debt.

“More work, much more work is needed now, and it’s urgent,” Draghi said.

Greece’s deputy prime minister Ioannis Dragasakis said in an interview published Sunday that Athens would stand firm in negotiations with its creditors.

“There is no way we would cross red lines that we have set,” he said, while refusing to rule out the possibility of new elections or a referendum if the talks remained deadlocked.

Both sides are seeking to do a deal before eurozone finance ministers meet on April 24.

“There are concerns over the ability of Greece and its creditors to reach an agreement at the euro finance ministers meeting,” Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow, wrote in a note to clients.

“The euro’s rally amid those circumstances feels all wrong.”

After the euro appeared last month to be on its way to hitting parity with the dollar for the first time since 2002, the embattled unit staged a rally, partly due to hopes for a Greek deal.

Draghi stood behind the euro at the weekend, saying it was “pointless to go short on the euro” and challenged traders who were sour on the currency to “do it”. Traders short sell a currency if they expect it to fall.