The euro fell for the first time in four days versus the dollar as investors expressed skepticism that the regionâ€™s debt crisis is being contained.
The shared currency slid versus most of its 16 most-traded peers as Greeceâ€™s coalition failed to reach a deal on 11.5 billion euros ($14.7 billion) of spending cuts. A German court will rule on the nationâ€™s participation in Europeâ€™s permanent bailout fund in two days, when the Netherlands is due to hold elections. Implied volatility of three-month options for Group of Seven currencies fell to an almost five-year low.
â€œWe had a fairly sizable rally in the euro late last week,â€ Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York, said in a telephone interview. â€œThereâ€™s still significant event risk this week, and markets are understandably in a more cautious mode.â€