Western Union notes:
The euro got 'carried' above two-week lows as markets grew nervous over prospects of Greece clinching an imminent deal for more rescue cash. Greece's creditors reportedly shot down Athens' latest proposal to win more rescue money, dealing a setback to negotiations.
The ECB's rock bottom interest rates leave the euro vulnerable to being used as a funding currency for bets on higher-yielding currencies like the dollar, so-called 'carry trades.' When a Greek deal appears in reach, markets tend to party and rush into higher-yielding plays. When confidence in a Greek deal wanes, party goers are often forced to buy back the euro as they unwind carry trades.
Upside for the euro looks limited after Germany's Ifo survey of business confidence weakened more than expected, hitting four-month lows, which offered evidence of Greek uncertainty increasing a headwind on the bloc's biggest economy.
