* Finance ministers give Greece two weeks notice
* Risk reversals show high demand for euro put options
* FOMC meeting this week unlikely to support dollar
(Updates prices, adds quotes and graphics, changes byline)
By Julie Haviv
NEW YORK, June 20 (Reuters) - The euro slid against the Swiss franc on Monday and could fall further after European finance ministers failed to provide clarity on Greece's outlook by delaying a decision on the next tranche of financial aid.
Euro zone finance ministers gave Greece two weeks from Monday to approve further spending cuts and tax rises in exchange for another 12 billion euros in emergency loans, piling pressure on Athens to get its ragged finances in order. [ID:nLDE75I0FM]
After two days of crisis talks, the ministers effectively issued Athens an ultimatum.
The euro's performance against the safe-haven Swiss franc has of late reflected investors' true sentiment on the euro zone's single currency.
The euro hit a session low of 1.2015 francs
"The strength of the franc shows investors are very nervous right now and are skeptical about Greece getting aid," said Kathy Lien, director of currency research at GFT Forex in New York. "If they were truly optimistic we would not see the franc continue to remain strong."
The euro was little changed against the dollar, recovering from losses that took it as low as $1.41910, well above a three-week low of $1.40730 hit on Thursday on trading platform EBS.
It was last at $1.43080
Other stories on euro zone crisis [ID:nLDE68T0MG] Graphics on Europe's debt crisis http://r.reuters.com/hyb65p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
A comment by Klaus Regling, chief of the European FinancialStability Facility, that the fund's guarantees will be raised to 780 billion euros from 440 billion, did lift the euro a bit, especially against the dollar and yen. For Regling, see [ID:nBRU011579].
The euro earlier hit session highs at $1.43280 in the wake of comments from EFSF's Regling.
There was also a sense of optimism in the market that the Greek parliament will likely pass the austerity plan and Greece's prime minister George Papandreou will win a parliamentary vote of confidence in the new cabinet on Tuesday.
Markets will now watch the result of a vote of confidence the newly reshuffled Greek cabinet faces on Tuesday. [ID:nLDE66D1JB]
"I don't think these pieces of positive news will change negative sentiment on the euro," said David Gilmore, a partner at currency research firm FX Analytics in Esse, Connecticut.
"Even if we assume the most optimistic view, we're just a few months away from September when the International Monetary Fund and the European Union have to go back to Greece and do another assessment for the next tranche."
Gilmore said he doesn't think there's any way Greece will perform to the "level of satisfaction that the IMF and EU are looking for and so we could be back to square one."
Traders said a move by the euro below $1.40730 would target the 200-week moving average around $1.40150.
GFT Forex's Lien said it will be difficult for the euro/dollar to make sustainable gains until there is more clarity about Greece's aid.
"I do not see a deal getting done until July," she said. "If an investor had to pick one week to reduce exposure to the euro this would be the week."
Risk reversals on euro/dollar options, which show strong demand for bets on the euro falling compared with bets on it rising, demonstrated the negative view investors have on the shared currency.
One-month risk reversals were trading around 2.7 percent
One factor that may lend support to the euro in the near term, however, is a U.S. Federal Reserve policy meeting later this week, traders said.
The Fed is expected to restate its commitment to hold interest rates near zero for an extended period amid fresh signs the U.S. recovery has lost momentum. It is likely to continue to reinvest proceeds from maturing bonds it holds to make sure its balance sheet does not shrink. [ID:nN14191675]
(Additional reporting by Gertrude Chavez-Dreyfuss)