The euro was declining against the US dollar today, trading at 1.4044 as of around 7:10 A.M., GMT.
The single currency is down 0.774% on the day and has reached a session high of 1.4136 with a low of 1.4027 so far.
The EURUSD has dipped to a three-day low which may be a result of the current EU sovereign debt crisis as EU foreign ministers prepare to meet to discuss a second economic bailout package for Greece.
“Investors, nervous, turned away from the euro as we approach the euro zone summit on Greece which they now see as a risky event,” noted Philip Wee from DBS Group Research.
Jean-Claude Trichet said on Sunday that the euro zone governments would be “responsible” for Greek debt in case of a default by Athens. He believes that if government decisions result in a Greek default, even a partial default, “they will have to provide guarantees to the European Central Bank and central banks of EU member states as means to protect the single currency.”
The negotiations leading up to the euro zone summit now concern how much private sector creditors will be part of any new bailout package. Germany is requiring banks to be involved in the plan this time in an effort to give the EU public, that is tired of paying other people’s bills, some reprieve.
In Athens on Sunday, US Secretary of State Hillary Clinton expressed her country’s support for the Greek government. She compared the efforts to bail Greece out as “chemotherapy” that is needed to overcome the “cancer” of debt.