Investing.com - The euro edged lower against the other major currencies on Wednesday after Greece became the first developed country to default on the International Monetary Fund as its bailout program expired.
EUR/USD eased to 1.1126 from 1.1145 late Tuesday.
The IMF confirmed that the Greek government failed to make a scheduled €1.6 billion loan repayment by close of business on Tuesday.
The fund said Greece can now only receive further funding after its arrears are cleared. Greece asked for a last-minute repayment extension on Tuesday, which the fund said it will consider "in due course."
A default by Greece wiIl add to fears over the country’s solvency and fuel doubts over the condition of Greek banks and the collateral they use for European Central Bank loans.
Earlier Tuesday the Greek government requested a new two-year bailout program and debt restructuring, the country’s third in five years. However the latest proposals came too late to prevent Greece’s existing bailout agreement from expiring.
Euro zone finance ministers were to hold discussions later Wednesday to discuss the latest Greek proposals but German Chancellor Angela Merkel has ruled out further negotiations until after Sunday's referendum in Greece.
Over the weekend Greek Prime Minister Alexis Tsipras called for a snap referendum to be held on July 5 on whether to accept the terms proposed by lenders for extending the country’s bailout.
European leaders have said the referendum is ultimately a vote on whether to remain in the euro zone.
EUR/JPY was at 136.47, little changed for the day, with EUR/GBP slid 0.2% to 0.7886.
The dollar was slightly higher against the yen, with USD/JPY easing up 0.11% to 122.63.
A report from the Bank of Japan on Wednesday showed that the outlook among large manufacturers improved in the three months to June, indicating that the economic recovery is gaining traction.
Meanwhile, data from China indicated that activity in the manufacturing sector remained sluggish in June but service sector activity showed a slight uptick.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 95.81, almost unchanged for the day.