Tokyo - The euro dipped on Monday as uncertainty swirled around last-ditch talks aimed at hammering out a debt deal for Greece, with eurozone leaders slapping the cash-strapped nation with an ultimatum for a desperately needed bailout.
The common currency stood at $1.1135 in Tokyo trading, slightly down from $1.1149 in New York late on Friday. In earlier electronic trading, the euro fell as low as $1.1089.
The unit was also weaker at 136.40 yen against 136.86 yen in US trade.
“Market reaction in the euro is surprisingly muted,” said Steven Englander, global head of Group-of-10 currency strategy at Citigroup.
“The absence of agreement and toughness of terms are eye-catching, but investors are waiting for the outcome more than trying to anticipate it.”
Athens appeared to be stuck between a rock and a hard place as the summit dragged on through the European night.
Its banks are set to run out of cash within days unless they receive a new injection, but the price for that three-year, 86 billion euro bailout is an unpalatable raft of reforms that hardline Germany is demanding.
Berlin wants Greece to take “time out” from the euro if leftist Prime Minister Alexis Tsipras does not accede to demands that the Greek delegation has said are “very bad” and would rob Athens of control of much its finances.
A dramatic weekend of backroom dealings in Brussels threatened to leave the European Union more divided than at any time in its 50-year history.
“There will be no agreement at any price,” German Chancellor Angela Merkel said as she arrived for the summit of 19 eurozone leaders, complaining of a loss of trust in Athens and warning of “tough negotiations” ahead.
Radical Greek leader Tsipras insisted Sunday a deal was possible “if all parties want it”, adding that he was ready for an “honest compromise” on Greece's plans for tax cuts and pension reform.
Tsipras came to power in January on a promise to end five years of austerity tied to two previous bailouts since 2010 that have left Greece with debt worth nearly 180 percent of its GDP.
The tensions in Brussels were underscored when EU President Donald Tusk halted the summit midway for three-way talks between Tsipras, Merkel and French President Francois Hollande.
“What we can see is that the optimism with which markets were travelling into the weekend looks misplaced,” Ray Attrill, co-head of forex strategy at National Australia Bank, said in a commentary early on Monday.
* Bloomberg News contributed to this report
AFP