Investing.com – The euro weakened further on Tuesday as talks between Greece and euro zone finance ministers reached an impasse, setting the stage for the current bailout agreement to lapse at the end of the month.
EUR/USD traded at 1.1334, down 0.18%. AUD/USD traded at 0.7784, up 0.14%, after the release of the minutes of the Reserve Bank of Australia’s most recent board meeting showed concern over the pace of growth and cut the cash rate 25 basis points to a record low 2.25%.
“In deciding the timing of such a change members assessed arguments for acting at this meeting or at the following meeting.” They preferred a February move because it “offered the opportunity of early additional communication in the forthcoming Statement of Monetary Policy,” the RBA said. That Feb. 9 statement contained revised forecasts and detailed commentary and came three days after the cut.
USD/JPY traded at 118.36, down 0.11%.
Talks between Greece and euro zone finance ministers over the country’s debt broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout as “unacceptable”.
The unexpectedly rapid collapse raised doubts about Greece’s future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro bailout, reverse austerity policies and end cooperation with EU/IMF inspectors.
Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month.
Greece’s current €240 billion bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.
Greece’s Finance Minister Yiannis Varoufakis said Monday that he was ready to sign a document drafted by the European Commission, which outlined a deal between Greece and its partners.
However, Varoufakis said, Eurogroup President Jeroen Dijsselbloem presented him with another document, which referred to past policies and was vague in key issues such as “flexibility”, which he could not accept.
Overnight, the dollar remained moderately lower against the other major currencies on Friday, as recent downbeat U.S. data continued to weigh and as trading volumes were expected to remain light with U.S. markets closed for the Presidents Day Holiday.
Sentiment on the dollar remained vulnerable after data on Friday showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 93.6, down from January’s final reading of 98.1. Economists had forecast an unchanged figure
The report came a day after data showing that U.S. retail sales unexpectedly fell 0.8% last month after dropping 0.9% in December, indicating that consumer spending remained sluggish at the start of the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 94.50, up 0.06%.