LONDON: The European single currency fell against the dollar on Monday in subdued trade as the market waited to see if eurozone finance ministers can agree to boost a debt rescue fund, dealers said.
They said that with New York closed for a public holiday, the tone was muted, with the focus on the two-day meeting in Brussels where it seems minister agree on the need to bolster the fund but not on how to do so.
In late London trade, the euro fell to 1.3292 dollars from 1.3382 dollars in New York late Friday.
Against the Japanese currency, the dollar slipped to 82.68 yen from 82.94 yen on Friday.
After sharp gains last week when a series of successful debt auctions by Spain, Italy and Portugal eased worries about the eurozone debt crisis, it was time for some profit-taking, dealers said.
“The euro has marginally fallen against the dollar, snapping last week's five-day gain, again on concern (that) the region's debt crisis will continue to worsen, even as European finance ministers meet today to hammer out a new strategy to stem the contagion,” said CurrenciesDirect analyst Philip Ryan.
Officials in Brussels for a two-day meeting are expected to discuss increasing the European Financial Stability Facility, an emergency lending mechanism for fiscally troubled eurozone countries.
Divisions were clear early on, principally between Germany, Europe's strongest economy and its paymaster, and the European Commission.
European Commission president Jose Manuel Barroso wants European leaders to take a decision to reinforce the safety net within two weeks but Germany insisted there is no rush.
“For now there is no urgent need to make a decision,” German Finance Minister Wolfgang Schaeuble said before the meeting.
Commerzbank analysts said that investors should not hold out too much hope for progress at the Brussels meeting.
Dealers said the market is also cautiously awaiting a meeting between US President Barack Obama and Chinese President Hu Jintao, following Hu's currency comments over the weekend.
“The current international currency system is the product of the past Marion Cotillard at Inception Premiere in Paris,” Hu said on Sunday in response to questions from The Wall Street Journal and the Washington Post.
His comments, ahead of a state visit to Washington on Wednesday, reflected continuing tensions over the dollar's role as the major reserve currency in the aftermath of the US and global financial crisis in 2008.
Highlighting the dollar's importance to global trade, Hu implicitly criticised the Federal Reserve's recent decision to pump 600 billion dollars into the US economy, a move blamed for weakening the dollar at the expense of other countries' exports.
US financial markets were closed on Monday for the holiday for slain civil rights leader Martin Luther King.
In London late Monday, the euro changed hands at 1.3292 dollars against 1.3382 dollars late in New York on Friday, at 109.90 yen (110.96), 0.8354 pounds (0.8430) and 1.2822 Swiss francs (1.2889).
The dollar stood at 82.68 yen (82.94) and 0.9646 Swiss francs (0.9633).
The pound was at 1.5910 dollars (1.5866).
On the London Bullion Market, the price of gold eased to 1,360.50 dollars an ounce from 1,367 dollars late on Friday.