Investing.com - The euro extended early losses on Tuesday, falling to one-month lows ahead of a euro zone summit on Greece later in the day, amid mounting fears that the country will exit the euro area.
EUR/USD was last down 0.79% to 1.0958, the weakest level since June 2 from 1.1026 earlier.
The single currency came under renewed selling pressure ahead of a euro zone summit which it was hoped would restart negotiations between Greece and its lenders.
Greek Prime Minister Alexis Tsipras was to present new proposals to euro zone finance ministers, ahead of a meeting of European leaders to discuss the aftermath of Sunday’s referendum in Greece.
Greeks overwhelmingly rejected demands for economic reforms in return for a bailout package from international creditors in a referendum on Sunday, escalating a standoff with its lenders.
Without a bailout agreement in place Greece may default on a €3.5 billion payment owed to the European Central Bank on July 20.
Greece last week defaulted on a €1.6 billion loan repayment to the International Monetary Fund.
Greek banks were set to remain closed through Wednesday after capital controls were extended, amid concerns that lenders are close to running out of cash. Banks have been shuttered since last Monday, with ATM withdrawals limited to €60 per day.
The ECB said Monday that it would keep its emergency liquidity assistance to Greece capped at levels announced last Monday.
However the ECB demanded that Greek banks put up more assets as collateral to secure the emergency funding, adding to pressure on Athens.
The euro was weaker against the yen and the Swiss franc, with EUR/JPY down 0.72% to 134.51, nearing Monday’s one-month trough of 133.85. EUR/CHF slid to 1.0392.
The dollar was almost flat against the safe haven yen, with USD/JPY at 122.54 from 122.88 earlier.
Investors were looking ahead to U.S. trade data later in the day amid concerns that the stronger dollar is acting as a drag on exports.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.61% to 97.02, boosted by increased safe haven demand.