* Market disappointed by lack of deal on Greece
* Lenders to meet next Monday to try again to reach
* Dollar hits 7-1/2 month high vs yen, breaks above 82 yen
By Nia Williams
LONDON, Nov 21 The euro slid on Wednesday after
Greece's international lenders failed to agree a deal to release
funds for the indebted country, although expectations of an
agreement next week could help to limit losses.
The yen also fell, hitting a 7-1/2 month low against the
dollar on speculation of more aggressive monetary easing in
Japan and after data showed Japanese exports fell for a fifth
Euro zone finance ministers, the International Monetary Fund
and the European Central Bank ended 12 hours of talks without
agreement on the next tranche of loans to Athens, as they
haggled over how to reduce the country's debt to a sustainable
The euro was down 0.5 percent at $1.2756, having
earlier dropped to a session low of $1.2736, with macro funds
cited as sellers. Traders cited stop-loss orders around
Lenders will now try to hammer out an agreement at another
meeting next Monday.
"Everyone is looking at the probability they will come up
with a solution by Monday," said Ulrich Leuchtmann, head of FX
research at Commerzbank, adding those expectations would support
the euro above last week's low of $1.2661.
"But I fear there may be more disappointment than many
people expect. The market has not properly priced the risks that
are on the table."
Leuchtmann said failure to agree on a Greek deal could leave
Athens bankrupt, and he expected any euro gains ahead of the
talks to be capped around this week's high of $1.2829.
The single currency is also under pressure from recent
economic data showing the euro zone is in recession and from
uncertainty over Spain. Madrid has not yet requested financial
aid and the country faces a secessionist threat in a regional
election on Sunday in Catalonia.
The dollar rose to 82.12 yen, its highest level since
early April, after breaking through a reported options barrier
at 82 yen and triggering stop-loss orders above.
It was the dollar's sixth consecutive day of gains against
the yen, and market players cited a further options barrier at
The euro also hit a 6-1/2 month high of 105.07 yen
before news of the failure of Greek talks in Brussels
knocked the single currency. It was last trading at 104.69 yen,
close to flat on the day.
Data showing Japan's exports fell more than expected in
October added to worries the country is slipping into recession,
and spurred more selling of the yen.
"The data was not just worse than expected but also
underscored the poor state of the economy. The yen's downtrend
seems pretty solid now," said Katsunori Kitakura, associate
general manager of market making at Sumitomo Trust Bank.
The yen has been falling sharply since Prime Minister
Yoshihko Noda called an election on Dec. 16. The main opposition
leader, a front-runner to become the next premier, is pushing
the Bank of Japan for more aggressive monetary stimulus.
Shinzo Abe, the leader of the Liberal Democratic Party has
called for "unlimited easing", pushing rates below zero,
directly underwriting bonds issued to fund public works, and
setting an inflation target as high as 3 percent.
Broad dollar gains helped the dollar index to climb
0.3 percent to 81.178, while the Australian dollar
slipped in line with other perceived riskier currencies, falling
0.2 percent to US$1.0364.