Investing.com - The euro was lower against the dollar on Tuesday, a day after its largest one-day decline in two months as concerns over the prospects of a Greek default continued to weigh.
EUR/USD was down 0.25% to 1.1278 from Monday’s close of 1.1314. In that session the single currency fell 1.05% against the greenback.
Fears over Greece continued to pressure the single currency lower even after the country’s labor minister said Tuesday that an agreement with its lenders would soon be reached.
Athens is scrambling to reach a cash-for-reform deal with its international lenders in time to avoid a cash crunch.
Over the weekend, a leaked memo from the International Monetary Fund showed that there is “no possibility” that Athens can meet a loan repayment due on June 5 without a deal to unlock outstanding bailout funds.
Last week Greece came close to defaulting on a €750 million IMF repayment, which it ultimately made by tapping emergency reserves in its holding account at the IMF.
The dollar fell to four-month lows against a basket of the other major currencies late last week after fresh batch of disappointing U.S. economic reports reinforced expectations that the Federal Reserve will delay hiking rates for longer.
The greenback rebounded on Monday as investors turned their attention to Friday’s U.S. inflation data and Wednesday’s minutes of the Fed’s April meeting for fresh indications on the timing of an initial rate hike.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.34.
The euro was also lower against the yen, with EUR/JPY down 0.25% to 135.41. USD/JPY was steady at 119.95.
The yen remained amid heightened expectations that the Bank of Japan will expand its massive stimulus program later this year. The central bank was expected to leave monetary policy unchanged at its upcoming meeting on Friday.