The euro slipped to a three-week low against the dollar on Monday, pressured by uncertainty about whether Greece would be able to secure aid this week to help service its ballooning debts. Traders were jittery before the March 25-26 summit of European Union leaders, while India's interest rate rise last week stung commodity currencies, denting risk demand and lifting the safe-haven dollar to its highest since early March versus a currency basket.
European leaders sent out conflicting signals at the weekend over aid to Greece, with Germany urging Athens to solve its debt problems alone while Italy strongly backed EU support. "With the EU summit coming up, Greece will be a central issue," said Gavin Friend, currency strategist at nabCapital.
At 1114 GMT, the euro was down 0.1 percent on the day at $1.3521, close to an earlier low of $1.3498, its weakest since March 2. It traded at around 1.4364 Swiss francs, teetering near a 17-month low of 1.4318 hit late last week, and touched its lowest in over a week against the yen around 122.18 yen.
"It seems there's agreement there will be some sort of assistance to Greece, but it's not clear what form that will take," said Carl Hammer, SEB currency strategist in Stockholm, adding this would keep the euro under selling pressure. Weakness in the euro helped the dollar index - which tracks the US currency's value against a currency basket to edge up 0.1 percent to 80.831, close to an earlier high of 80.966, its highest since March 2.
The dollar remained rangebound versus the yen at 90.55, with support around 89.75 and resistance just over 91.00 yen. The Australian and New Zealand dollars slipped 0.4 and 0.7 percent respectively against their US counterpart as European shares fell 1 percent.
The commodity-linked currencies, which are also considered to be higher-risk, continued to smart from Friday's surprise Indian rate rise. Analysts expected such uncertainty to keep the euro weak, even as data from the Commodity Futures Trading Commission showed speculators' net short positions on the euro fell to 46,341 contracts last week from 74,551 the week before.