Euro turns broadly lower amid caution over Greece

23/06/2015 11:49 AST

The euro weakened against the other major currencies on Tuesday as initial optimism over a Greek debt deal gave way to a more cautious mood, while upbeat U.S. housing data boosted the dollar.

EUR/USD was down 0.8% to 1.1249 from Monday’s highs of 1.1409.

Euro zone finance ministers failed to reach agreement over Greece’s bailout at an emergency meeting on Monday, but indicated that a final deal could be made later this week.

Eurogroup head Jeroen Dijsselbloem said new reform proposals from the Greek government were “broad and comprehensive,” and a good basis to restart stalled negotiations.

But German Chancellor Angela Merkel and International Monetary Fund head Christine Lagarde both warned that there was still a lot of work to be done.

Greece’s existing bailout is set to expire at the end of this month, when it must also repay €1.6 billion to the IMF.

A default by Greece could trigger the country’s exit from the euro zone. The euro was lower against the yen and the pound, with EUR/JPY down 0.48% to 139.23 and EUR/GBP sliding 0.53% to 0.71.28.

The dollar pushed higher against the yen, with USD/JPY advancing 0.26% to 123.70.

Demand for the dollar continued to be underpinned after data on Monday showed that U.S. existing home sales jumped to a five-and-a-half year high in May.

The National Association of Realtors said home resales increased 5.1% to an annual rate of 5.35 million units, the highest level since November 2009.

Economists had forecast a more modest 4.4% rise.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.55% to 95.04 from Monday’s lows of 93.99.

Investing.com