Euro steady as Greece debt talks stay deadlocked

[NEW YORK] The euro was little changed against the dollar on Thursday as Greece once again failed to reach a deal with its creditors to avoid a debt default.

Greece's emergency negotiations with its creditors - the European Union and the International Monetary Fund - ended abruptly Thursday, pushing the crisis toward a critical weekend meeting in a bid to avoid a default by Athens and its potential exit from the eurozone.

Talks will resume on Saturday, just days before Greece is at risk of missing a 1.5 billion euro (S$2 billion) IMF debt payment on June 30, the same day its EU bailout is set to expire.

Greece needs creditors to unlock the remaining 7.2 billion euros in its bailout to pay the IMF.

"Talks between Greece and the EU are running down to the wire," said Omer Esiner of Commonwealth Foreign Exchange. "Comments from the sidelines of the meetings have not instilled much confidence in markets that a deal to avert a Greek default and possible exit from the euro is likely."

Mr Esiner said that the medium and longer-term outlook for the euro remained negative based on the divergent policy outlook between the struggling eurozone and the United States.

The European Central Bank has launched a massive stimulus to spur growth in the flagging 19-nation currency bloc, while the US Federal Reserve is poised to raise interest rates this year as the economy improves.

Government data on Thursday showed US consumer spending jumped 0.9 per cent in May, its biggest monthly gain in almost six years. That could support the Fed's decision to start lifting its key interest rate, analysts said.

AFP