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Talks continued through the weekend and Athens
sounded upbeat, but its lenders said compiling a list of reforms
could take several more days. Fitch cut Greece's credit rating
to 'CCC' from 'B' on Friday.
The dollar rose after Federal Reserve chair Janet Yellen
underscored the view that the Fed is likely to start raising
interest rates gradually later this year.
The dollar rose 0.5 percent to 119.78 yen <JPY=>, while the euro
fell 0.6 percent to $1.0830 <EUR=> as it pulls away from a
12-year trough of $1.0457.
"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.
"Unless the euro drops below $1.0770 we could see ranged
trading, but with the Fed still looking to raise rates, we could
see conditions later this week that are more helpful for overall
dollar strength."
The euro got little help from data that showed consumer prices
in Germany picking up. Prices are set to rise in March after
falling in the first two months of this year, but inflation is
still likely to remain low.
"It is a lot more complicated than just looking at Germany. Yes,
we need to see higher inflation in Germany, which would help a
price adjustment, but at best better German data is just going
to halt the euro decline rather than reverse it," said Simon
Smith, chief economist at FxPro.
For the dollar, U.S. jobs data on Friday will be the key event
this week. A robust report could see investors position for
tighter monetary policy sooner rather than later. <ECONUS>
In a speech on Friday, Yellen outlined the case for a
'gradualist approach' to rate hikes, mirroring comments after
the FOMC meeting on March 18. She signalled the Fed is likely to
start raising rates later this year but said policy tightening
could "speed up, slow down, pause, or even reverse course"
depending on developments in the economy.
"The jobs numbers are going to be important, but I don't think
they will be the deciding factor determining when the Fed does
eventually put rates up," Smith said.
(Additional reporting by Anirban Nag; Editing by Larry King)
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