Euro slides, stocks struggle on Greek woes

The euro sank Tuesday to a one-month dollar low and European stock markets struggled on concerns over Greece's ability to meet looming debt repayment deadlines, dealers said.

The European single currency slid to $1.0860 in early morning trade, as the dollar was also boosted by expectations the US Federal Reserve will raise interest rates in the coming months. The shared eurozone unit later stood at $1.0901, down from $1.0980 late on Monday.

"The euro has been crashing back down to earth," said analyst Angus Campbell at traders FXPro, adding that "investors see the mountain that Greece has to climb".

In midday equity deals, London's FTSE 100 index shed 0.10 percent to 7,024.90 points and Frankfurt's DAX 30 dipped 0.39 percent to 11,768 compared with Friday's closing levels. Both markets were shut Monday for a holiday.

In Paris on Tuesday, the CAC 40 in Paris added 0.43 percent to 5,139.30 compared with the close on Monday, when it had lost 0.50 percent in value.

"The eurozone is on edge as the countdown begins to Greece's next two debt repayment instalments," said Currencies Direct analyst Phil McHugh.

"Greece's crunch point is its debt repayments to the International Monetary Fund on 5 and 12 June.

"Reports over the weekend suggest that Greece won't be able to make these payments without striking a deal with its creditors."

Greece is facing a cash crunch because Athens has been unable to agree with its creditors -- the International Monetary Fund, the European Union and the European Central Bank -- on reforms that would unlock some 7.2 billion euros ($7.2 billion) in promised bailout cash.

Over the weekend, a cabinet minister said Greece had "no money" to make a series of repayments to the IMF from June 5, but a government spokesman insisted the country would keep up payments as long as it could.

Talks between Greece and its creditors should "speed up", the EU's Economic and Financial Affairs Commissioner Pierre Moscovici said Tuesday after the Greek government warned it was running out of money.

"We are aware of the liquidity problems in Greece and this is why it's so important now that negotiations that take place in Brussels speed up," Moscovici told reporters on the sidelines of a conference in Dublin.

"We want that agreement, we want it fast -- we are working on it hard."

Major Asian markets mostly rose Tuesday, with Hong Kong and Shanghai leading the way, while Tokyo marked an eighth straight gain to a 15-year high.

Hong Kong added 0.92 percent to 28,249.86 -- its highest close since December 2007 -- and Shanghai jumped 2.02 percent to 4,910.90 -- the highest since January 2008.

The indices were boosted by hopes for fresh Chinese measures to boost the economy as well as Beijing's decision Friday to relax rules on access to mainland financial markets.

Tokyo ended up 0.12 percent, helped by a weaker yen, hopes for corporate earnings and the Bank of Japan's ultra-loose monetary policy.

With Wall Street and most European markets closed Monday for public holidays there were few catalysts outside Asia to drive business.

The dollar has meanwhile been underpinned by growing hopes the Federal Reserve will raise interest rates in the coming months -- a view supported by comments from Fed chief Janet Yellen who said Friday she expects a hike "at some point this year".

burs-rfj/boc