Greek woes weaken euro

NEW YORK: The euro traded near a one-week low against the dollar amid concern the European Union will fail to take sufficient measures to help Greece tackle its fiscal deficit, diminishing demand for assets in the region.

The 16-nation currency was also close to its lowest in a week versus the pound after the EU stopped short of offering concrete steps to help Greece following a summit yesterday.

Europe's single currency declined as statements by European leaders left open how the EU would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits.

The agreement, brokered by German Chancellor Angela Merkel, Greek Prime Minister George Papandreou and European Central Bank President Jean-Claude Trichet, called for closer monitoring of the Greek economy.

"Greece's debt woes continue to weigh on the euro, notwithstanding any potential bailout," Emma Lawson, a currency strategist in London at Morgan Stanley, wrote in a research note yesterday. "We remain short of the euro with a target of US$1.28."

The common currency has fallen 4.5 per cent against the dollar this year on concern that nations with the biggest debt burdens will struggle to meet their obligations. Investor attention turns to a meeting of finance ministers in Brussels on Monday.

- BLOOMBERG