The single currency weakened initially as uncertainty whether the EU-IMF aid would arrive in time to avoid the eurozone's first sovereign default drove investors to sell euro on Monday.

Although euro rebounded to 1.3398 in Asian morning, the pair dropped from there and tumbled to 1.3291 in European morning on renewed worries over Greece as investors concerned about the potential conditions linked to the loan offered to Greece as German Chancellor Merkel said Greece must show it can return to sustainable economic path and further savings measures needed from Greece. Greek 5-year and Portuguese 5-year credit default swaps once hit session highs of 713 basis points and 318 basis points respectively. However, the single currency staged a strong rebound later and pared most of its early loss in NY afternoon. In other news, ECB's Weber stated the recovery of eurozone was under way and expected the second quarter will be much stronger than the previous one.

The British pound surged in Asian morning from 1.5365 on active cross-buying of sterling vs yen and euro due to the concerns over Greece's debt problems as Greece had been told to produce detailed plans this week to meet its budget deficit reduction targets in 2011 and 2012. Price picked up more upward momentum after triggering stops above last Friday's high at 1.5399 and eventually hit 1.5498 before stabilizing.

Versus the Japanese yen, the greenback once hit 94.37 on speculation that Federal Reserve would raise interest rates before year end. The pair then spent the day inside the narrow range of 93.85-94.37 range on Monday as focus was on the single currency over the Greece's debt problems.

Economic data to be released on Tuesday include Australia PPI, business confidence, Germany Gfk index, import price index, export price index, U.K. CBI distribution trade, consumer confidence, U.S. Midwest manufacturing, consumer confidence.