Reuters — Concerns about situations involving Greece, Italy and the European Central Bank kept the euro under pressure on Tuesday.
The euro slid 0.45 percent to $1.1114 in its fourth session of declines.
James Woods, global investment analyst at Rivkin Securities in Sydney, attributed most of the currency’s decline on Tuesday to a German press report (in Bild, not citing sources) saying Athens may opt out of its next bailout payment if creditors cannot strike a debt relief deal.
“The bailout payments are necessary to meet existing debt repayments due in July, so if Greece were to forgo this bailout payment the probability of a default would spike, reopening the discussion around a Grexit from the Euro zone,” Woods said.
However, he cautioned against reading “too much into it” without more details or confirmation, adding it was unlikely Greece would forgo the bailout payment at this stage.
Euro zone finance ministers failed to agree with the International Monetary Fund on Greek debt relief or to release new loans to Athens last week, but did come close enough to aim to do both at their June meeting.
Comments by former Italian Prime Minister Matteo Renzi on Sunday in favour of holding an election at the same time as Germany’s in September also raised uncertainty and pulled the euro lower.
So did a statement by European Central Bank President Mario Draghi reiterating the need for “substantial” stimulus given subdued inflation.
