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Europe's common currency tumbled 0.7 per cent to $1.2942, after reaching its highest level since January 3rd yesterday (January 24th), reports Bloomberg. The euro also moved back 0.2 per cent to 101.08 yen.
The ECB is uncertain about the prospect of joining private-sector investors in helping Greece restructure its debts amid concerns this could damage confidence in the central bank.
"These headlines are negatively affecting confidence and putting downward pressure on the euro," said Elizabeth Gregory, a market strategist at Swissquote Bank.
She added that the drawn-out nature of the negotiations is also having an impact on the market, pointing out that some level of restructuring is ultimately going to be necessary.
Reuters noted yesterday that the euro was at risk of paring its gains against the greenback after an offer from private creditors to help restructure the debt was rejected.
Posted by Greg Secker
