Greek Uncertainty causes decline in Euro

According to experts, the euro dropped owing to uncertainty over whether Greece and its international creditors will strike a deal that will be helpful for Athens to secure funding before it runs out of money by April 20.

Discussions continued through the weekend on reforms to open loans and Athens sounded an upbeat tone. But according to lenders, it might take several days before an appropriate list of measures was ready. The dollar climbed broadly and was helped by comments from Federal Reserve chair Janet Yellen.

Yellen highlights the view that the Fed will possibly begin raising interest rates gradually later this year. The dollar mounted up 0.3% to 119.50 yen and the euro dropped 0.6 % to $1.0830.

"Even though euro short positions are at record highs, given the Greek uncertainty and the bias for more monetary injection by the European Central Bank, the path for least resistance is a lower euro/dollar", said Jeremy Stretch, head of currency strategy at CIBC World Markets.

Yellen described the case for a 'gradualist approach' to rate hikes and also indicated that the Fed will possibly begin raising borrowing costs later this year. She also said that policy tightening might accelerate, slow down, pause, or even reverse course relying on actual and expected developments in the economy.

Ray Attrill, global co-head of FX strategy at National Australia Bank, said that Yellen went to great length to describe that why rate hikes would not be rushed and eventually might not reach levels earlier considered to be 'normal'. Heng Koon How, senior FX strategist for private banking and wealth management at Credit Suisse in Singapore said that their view of the US dollar remains broadly positive.