The euro slipped against majors before deadline set by international lenders for Greek political party leaders to respond to the austerity proposal needed to grant Greece a second bailout worth 130 billion euros.
Greece remains under the spot on concerns political leaders may not reach consensus regarding further spending cuts needed to receive the aid, thus tumbling into default as early as March as the government has to repay 14.5 billion euros of debt maturing.
Greek Prime Minister Lucas Papademos managed to reach a tentative agreement with three of political party leaders after talks yesterday.
According to an e-mailed statement from the premier's office in Athens, Papademos and the three political leaders agreed to make further budget-cutting measures equal to 1.5% of GDP in addition to bank recapitalization framework, wage cuts and measures to enhance competitiveness, where he will gather today with the three leaders to flesh out details of the aforesaid plan.
Antonis Samaras, the head of the second biggest political party, however, said they are asking us for greater recession, which the country can't take, and I will fight to avoid that.
The response of Greek political leaders for the measures demanded by international lenders must be provided at 11 a.m. local time today, which is a deadline imposed by the lenders.
On the other hand, talks with private-sector bondholders are still ongoing, where expectations refer to the acceptance of 3.6% borrowing cost on 30-year bills and losses equal to 70% incurred by creditors.
Moreover, what added further negativity to the sentiment is the International Monetary Fund (IMF) lowering to Chinese growth forecasts for this year to 8.25% expansion, down from the previous forecast of 9.0%, due to the expected weakening exports and as inflation is projected to ease further.
Concerning the EUR/USD, the pair fell over daily basis to trade around 1.3050, after recording a high of 1.3131 and a low of 1.3028.The suggested trading range for this week is among key support at 1.2745 and key resistance at 1.3375.
The U.S. dollar index (USDIX), on the other hand, rebounded against a basket of major currencies, where the dollar index rose to 79.40 compared with the day's opening level of 78.08.
The USD/JPY is currently trading near the day's opening level around 76.60 after reaching a high of 76.80 and a low of 76.47, where the trading range for this week is among key support at 75.25 and key resistance now at 78.90.
Moving to the GBP/USD pair, it is currently traded lower around 1.5740 after touching a high of 1.5821 and a low of 1.5728, where the pair has followed by the general sentiment which is fueled worries from Greece, thereby lowering demand on high-yielding currencies.The trading range for this week is among key support at 1.5360 and key resistance at 1.6165.