Investing.com - The euro erased early gains against the dollar on Tuesday as uncertainty over deadlocked Greek debt negotiations continued to cloud the outlook for the single currency.
EUR/USD was last at 1.1272, off session highs of 1.1344 and down from 1.1290 late Monday. The pair ended that session up 1.71%.
Athens submitted new proposals for economic reforms to the European Commission on Tuesday, fuelling hopes for a breakthrough that could unlock new funding before the country runs out of money.
Greek Prime Minister Alexis Tsipras said the two sides could reach a deal if Greece’s creditors dropped demands to cut pensions and other proposals which would push Greece deeper into recession.
German Chancellor Angela Merkel warned Monday that “there isn’t much time left” to reach an agreement on a cash-for-reforms deal.
Athens delayed a key debt payment to the International Monetary Fund on Friday and its current bailout program is due to expire at the end of this month.
Data on Tuesday confirmed that the euro area economy grew 0.4% in the first three months of the year.
But the Greek economy contracted 0.2% in the quarter, sending the country back into a recession.
The euro rallied against the dollar on Monday, boosted by higher German bund yields and data showing that the German economy, the euro zone’s largest, was regaining momentum after a lackluster first quarter.
The dollar remained on the back foot following reports on Monday that President Barack Obama voiced concerns over its strength at the G7 summit meeting. The White House later denied the reports.
USD/JPY eased to 124.19, pulling further back from the 13-year highs of 125.84 struck on Friday after a robust U.S. jobs report bolstered expectations that the Federal Reserve will hike interest rates later this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 95.27, not far from overnight lows of 94.86.