Euro Weakens From 3-Month High as Crisis Optimism Wanes

The euro fell for the first time in four days versus the dollar as investors expressed skepticism that the region's debt crisis is being contained.

The shared currency slid versus most of its 16 most-traded peers as Greece's coalition failed to reach a deal on 11.5 billion euros ($14.7 billion) of spending cuts. A German court will rule on the nation's participation in Europe's permanent bailout fund in two days, when the Netherlands is due to hold elections. Implied volatility of three-month options for Group of Seven currencies fell to an almost five-year low.

“We had a fairly sizable rally in the euro late last week,” Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York, said in a telephone interview. “There's still significant event risk this week, and markets are understandably in a more cautious mode.”

via Bloomberg