By Sam Forgione
NEW YORK (Reuters) – The U.S. dollar rose against the euro on Monday on renewed worries over a Greek exit from the eurozone, while the New Zealand dollar hit more than seven-week lows against the greenback on speculation the country’s central bank might cut interest rates.
Finance ministers of the euro zone welcomed progress in negotiations between Greece and its creditors on a cash-for-reform deal but said more work is needed to bridge differences holding up a comprehensive agreement. The Eurogroup met Monday to discuss Greece.
“The focus has shifted back onto Greece,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “The clock is going to be counting down as to when Greece finally runs out of cash.”
The chances that Greece will leave the eurozone are slightly less than one in four, according to a Reuters poll of traders, but if Athens defaults on a IMF loan on Tuesday, the likelihood will increase.
Analysts also said investors were continuing to take profits in the euro after the currency rallied to a more than two-month peak of $1.1392 last week.
The dollar benefited from the jitters over Greece and notched its third straight session of gains against the euro. The dollar index, which measures the greenback against a basket of six major currencies, also posted its third straight session of gains.
The New Zealand dollar posted its biggest one-day decline against the greenback since late 2011 as speculation that the country’s central bank could cut rates gathered momentum. The New Zealand dollar set a 7-1/2 week low of $0.7337 against the U.S. dollar in U.S. trading <NZD=D4>.
Sterling, meanwhile, hit its highest level of the year against the dollar, at $1.5611, after Prime Minister David Cameron’s British election victory last week.
“You still have a bit of post election momentum for sterling,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
The euro was last down 0.5 percent against the dollar at $1.11535 <EUR=EBS>. The dollar was up 0.4 percent against the Swiss franc <CHF=EBS> at 0.93440 franc, and was up 0.2 percent against the yen at 120.130 yen <JPY=EBS>.
The dollar index was up 0.3 percent at 95.046 <.DXY>.
(Additional reporting by Jemima Kelly in London; Editing by Lisa Von Ahn; and Peter Galloway)