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Euro falls

February 17, 2015

The euro slipped more than a full cent on Tuesday before recovering slightly after talks between Greece and eurozone finance ministers broke down. Global markets also retreated as a result of the impasse.

Euro coins in front of a Greek flag
Image: picture-alliance/dpa/U. Deck

The euro dropped to $1.1322 on Tuesday, more than a cent below Monday's high of $1.14295, before erasing losses to trade at $1.1359. But it stayed well above last week's low of $1.1270 and its 11-year trough of $1.1098 on January 26.

European shares fell on Tuesday after talks between Greece and euro zone finance ministers over the country's rescue package broke down, raising doubts about Athens' future in the euro.

The pan-European FTSEurofirst 300 index was down 0.3 percent at 1,497 points early in the morning.

US stock futures and share markets in Asia both retreated as a result of the fall. Futures fell 0.4 percent while Japan's Nikkei share average shed 0.1 percent. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent.

European shares look set to extend their declines, with financial spread betters forecasting falls of up to 0.7 percent in Germany's DAX and 0.6 percent in France's CAC 40.

Optimism subsides

"The market had been a bit optimistic about an agreement so it was a bit of a surprise," Kyosuke Suzuki, director of forex at Societe Generale, told the Reuters news agency.

"But from the past experience during the eurozone debt crisis, the market is also accustomed to negotiations dragging on until the very last minute. So while the tail risk appears to be rising, there is no panic in the market," he added.

Global shares had hit their highest levels since September thanks to optimism over the Greek debt talks on Monday. The somber mood supported safe-haven bonds, with US bond yields falling to 2.005 percent as a result.

bk/cjc (Reuters, dpa)