Euro Drops, Global Stocks Pare Gains on Greece Bailout Concerns

As reported by Rita Nazareth from bloomberg, the euro fell while global stocks and commodities trimmed gains amid concern European officials will delay Greece’s second bailout, tempering optimism that China will get more involved in the region’s rescue efforts.

The euro slipped for a fourth day against the dollar, losing 0.5 percent to $1.3066, and weakened against 15 of 16 major peers as of 11:15 a.m. in New York. The MSCI All-Country World Index added 0.4 percent, erasing yesterday’s 0.4 percent drop. The Standard & Poor’s 500 Index was little changed near the 1,351 level. The cost of insuring against default on European government bonds gained for a sixth day. The S&P GSCI Index rose 0.7 percent, paring an earlier 1.4 percent advance.

Greek Finance Minister Evangelos Venizelos said that Europe’s wealthier countries are “playing with fire” by considering expelling the nation from the 17-nation euro currency as talks over a second aid program ran into new obstacles. A decision slated for tonight on aid totaling 130 billion euros ($171 billion) was postponed until at least Feb. 20 and possibly until after a full-time Greek government emerges from elections later in the year.

“It’s all about headlines whipping price action around,” said Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York. “It’s lack of details from China’s pledge and lack of details with regards to Greece and if they’re going to be able to secure the next round of aid weighing on the euro.”

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