Investing.com - The euro fell sharply on Monday after last ditch Greek debt negotiations broke down over the weekend, bringing the country a step closer to a debt default ahead of a looming deadline for a repayment to the International Monetary Fund on Tuesday.
EUR/USD hit lows of 1.0953, the weakest since June 2 and was last at 1.1076, off 0.78% for the day.
Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the IMF, but without a rescue package in place Greece will almost certainly default.
Greek Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout.
European finance ministers refused a request from the Greek government to extend the bailout program until after the referendum.
The European Central Bank said Sunday it will continue providing emergency liquidity assistance to Greece’s banks, but capped emergency funding at current levels.
The ECB said it was monitoring the situation and stood ready "to reconsider its decision."
A Greek official said Monday that banks would remain closed for six days starting on Monday to avert a crisis in the banking sector after deposit outflows accelerated over the weekend. Withdrawals at ATM machines were to be limited to €60 a day per account.
The euro was also lower against the yen and the Swiss franc, with EUR/JPY down 1.63% to 136.07 and EUR/CHF falling 0.59% to 1.0367.
The yen and the Swissy, seen as safe haven investments, typically rise during periods of market turmoil.
The dollar was also lower against the yen, with USD/JPY down 0.78% to 122.88.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.37% to 95.95.