(Bloomberg) – The euro fell against the dollar – and a measure of its volatility increased to the highest since 2011 after the latest negotiations over Greece’s bailout fell apart. The 19-nation currency weakened against most of its 16 major peers after talks in Brussels between the indebted nation and its creditors collapsed on Sunday.
The focus of negotiations now moves to a meeting in Luxembourg of euro-area finance ministers on Thursday, with Greece seeking as much as 7.2 billion euros ($8.1 billion) before its current bailout deal expires.
“Thursday is really the crunch meeting,” Trevor Greetham, head of multi-asset at Royal London Asset Management Ltd, which manages around $97 billion, said in an interview on Bloomberg Television’s “Countdown” with Anna Edwards. “We’re going to see volatility during the week. Things are really kind of hotting up.”
The euro slipped 0.4 percent to $1.1217 in early morning, New York time, and weakened 0.3 percent to 138.64 yen. The dollar rose 0.2 percent to 123.61 yen.
With two weeks until its euro-area bailout expires and no future financing arrangement in place, creditors had set June 14 as a deadline to allow enough time for national parliaments to approve an accord. Thursday’s meeting may now become a make-or- break session deciding Greece’s ability to avert default and its continued membership in the 19-nation euro area.
“There’s still an enormous amount to play for, but as things stand, you’d have to say that the risk of some kind of a default event at the end of June” is close to 50:50, Ray Attrill, global co-head of currency strategy at National Australia Bank Ltd in Sydney, said in a Bloomberg Television interview.
