The euro slumped against the dollar on Monday on worries over whether Greece would secure aid before it runs out of cash in three weeks, while the greenback gained versus other currencies on the view the Federal Reserve will raise U.S. interest rates this year.
Athens sounded upbeat about talks with its creditors to release funds from its 240-billion-euro aid package while Germany called for a more detailed list of reforms.
Concerns about the negotiations were mitigated by encouraging European data. A report showed confidence in the euro zone economy rose to its highest since July 2011 and a positive reading on German inflation raised hopes the region would avert deflation.
The euro remains under pressure from the diverging policy paths of the Fed and the European Central Bank, supporting the notion it would fall to parity with the dollar this year, analysts said.
“That’s a pretty strong headwind for the euro,” said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.
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