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Dollar slips as Greek talks fray

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The dollar edged lower versus the euro on Wednesday as new divisions between Greece and its official creditors raised the risk quotient in the market.

[NEW YORK] The dollar edged lower versus the euro on Wednesday as new divisions between Greece and its official creditors raised the risk quotient in the market.

Late-night talks in Brussels between Greek Prime Minister Alexis Tsipras and EU President Jean-Claude Juncker aimed to resolve the differences holding up the release of 7.2 billion euros (S$10.84 billion) in new funds to help the country avert a disastrous default at the end of the month.

The dollar, which had powered up 1.5 per cent on the euro Tuesday as a deal seemed close, gave up 0.3 per cent to US$1.1208 per euro as caution filled the markets.

With other risks around, the market did not reward the dollar when the third official estimate of first-quarter US growth showed a smaller contraction than earlier believed, 0.2 per cent rather than 0.5 per cent.

Boris Schlossberg of BK Asset Management said a final deal would not necessarily help the euro.

"Any relief rally may be short-lived however, as markets could focus on the possible further liquidity expansion by the ECB in the wake of any formal agreement," he noted.

AFP