Mounting concern about Greece’s future is taking a toll on the euro — and yes, the dollar is benefiting from that — but an aggressive rally in the greenback is unlikely while U.S. data remains weak, analysts said.
The euro skidded 0.8 percent to around $1.0892 on Monday after Greece missed a self-imposed Sunday deadline to reach a deal with its lenders to unlock crucial aid. An agreement is seen as key for Greece avoiding a debt default and dodging a potential exit from the euro zone.
“We have moved from a situation where Greece really wasn’t an issue and people were not pricing it in to now, where it is becoming an issue for the euro,” Geoffrey Yu, a currency strategist at UBS, told CNBC. “I wouldn’t say the euro is going to correct massively yet, because even under a negative scenario where Greece missus a (debt) payment, Greece is largely quarantined and the risks are not systemic.”