* Euro falls with Greece remaining a key focus
* Dollar and Swiss franc up vs most majors
(Updates prices, adds quote, details, changes dateline,
NEW YORK, June 27 The euro fell against the
dollar on Monday ahead of a key vote this week by the Greek
parliament on austerity measures.
While the euro had been swinging between gains and losses
it fell firmly into the red after Moody's said Greek banks have
lost about 8 percent of their private-sector customer deposits
so far this year. The ratings agency warned that those
institutions would face severe cash shortage if outflows mount
to 35 percent of their deposits. For more see [ID:nN1E75Q0CT].
Earlier the euro zone single currency had fallen to a
record trough against the Swiss franc before the expected
Analysts said the euro would be vulnerable to selling on
any comments from Greek or other European officials which may
cast doubt on the ballot's outcome, although many in the market
believe the austerity measures will be approved.
Earlier the euro was boosted when French President Nicolas
Sarkozy said French banks have agreed to roll over holdings of
Greek debt for 30 years, President Nicolas Sarkozy said on
Moody's "adds to the uncertainty," said Kathy Lien,
director of currency research at GFT Forex in New York.
"The fate of the euro/dollar hinges on the outcome of the
In early New York trade, the euro EUR= was 0.1 percent
lower at $1.4173, having spiked as high as $1.4236 and as low
as $1.4101, according to Reuters data.
Demand from sovereign entities triggered the early move
higher, which was exacerbated as stop-loss orders were tripped,
Technical analysts said the euro needed to close above its
100-day moving average, a key resistance level, to ensure a
sustained rise higher.
Earlier the euro and the dollar fell to record lows against
the Swiss franc on EBS EURCHF=EBS, after a dramatic rally in
the safe-haven Swiss unit since April.
The possibility of a Greek default has raised concerns
about the health of the European financial system and whether
it can withstand such a credit event. Such worries triggered a
sell-off in Italian banking shares late last week.
"Wednesday should see parliament agree to austerity
measures endorsed by the EU and IMF, while Thursday's vote is
likely to be contentious as it includes specific details
related to privatisation, taxation and spending," said Eric
Theoret, currency Strategist at Scotia Capital in Toronto.
"Sarkozy has provided euro-positive commentary relating to
private sector involvement in a debt rollover with
participation expected at 70 percent of current holdings."
Overall, the dollar has benefited from broad risk aversion
stemming from the ongoing euro zone debt crisis, as investors
have been cutting back on short positions in the U.S. currency.
Against the yen JPY=, the dollar rose 0.7 percent to
Analysts say persistent uncertainty about debt problems in
Greece and the rest of the euro zone would support the dollar,
but they warn that the struggling U.S. economy is far from
stable, while Washington suffers from its own fiscal problem as
it approaches its debt ceiling again which could haunt the
dollar in the longer term.
"The fortunes of the USD will be determined largely by the
mood in the euro zone as the USD is now fulfilling the role of
'not being the EUR', capitalizing on any bad news and
retreating when the market gets more hopeful," Credit Agricole
analysts said in a note.
"This has lent it more of a safe-haven status recently in
relation to peripheral stories, but its reaction to softer U.S.
data remains ambiguous."
(Reporting by Nick Olivari; Additional reporting by Naomi
Tajitsu in London; Editing by James Dalgleish)