The euro fell slightly despite the Greek Parliament's passage of a new round of austerity measures aimed at resolving the country's sovereign-debt crisis.
The common currency got an early boost just after the Parliament approved new austerity measures and a bond swap to help reduce its debt burden. Both steps are crucial for the country to receive another round of bailout funds from the European Union, European Central Bank and International Monetary Fund. However, the euro steadily lost steam throughout the day as it became clear that Greece has more hurdles to jump before receiving its bailout.
Late Monday in New York, the euro fell to $1.3187 from $1.3199 late Friday. It was at ¥102.28 from ¥102.44. The dollar was at ¥77.57 from ¥77.61. The pound traded at $1.5766 compared with $1.5755, while the dollar bought 0.9164 Swiss franc from 0.9166 franc late Friday.
"It is a step in the right direction," said Robert Lynch, a currency strategist at HSBC in New York, of the Greek vote. "But obviously it's not done. A number of things that have to be completed haven't been yet."
That includes approval from euro-zone finance ministers, which could come at a scheduled meeting Wednesday. Traders are also waiting to see how the European Central Bank might participate in any debt exchange.
As part of a debt exchange, private bondholders are expected to take a steep loss as Greece swaps out existing debt for new longer term bonds with lower interest rates. The ECB is unlikely to take any losses on Greek debt it holds, but it might also forgo profit from the bonds it purchased in the secondary market.
Negotiators are discussing potential sweeteners, either cash or short-term bonds issued by the European Financial Stability Facility, that would entice more private bondholders to participate in the debt swap.
Greece must repay €14.4 billion in maturing government bonds March 20, which is considered the hard deadline for when a debt-restructuring and bailout agreement must be completed.
Negotiators also must hammer out details such as target debt levels for Greece to adhere to in order to receive the bailout. Greece's debt is at about 160% of its gross domestic product. Officials have said a 2020 target of 120% may be raised to 125% as part of the agreement.
With so many questions unanswered, market participants said the euro could remain range-bound for the foreseeable future.
Win Thin, global head of emerging-markets strategy at Brown Brothers Harriman in New York, said the euro is likely to remain stuck between $1.31 and $1.33 because of the uncertainty.
"I don't think you want to be short the euro," Mr. Thin said. On the other hand, "the corrections in the euro have been pretty shallow. We're still in a wait and see."
Elsewhere, the yen was able to trade nearly flat against the dollar as well even though the country announced its economy contracted at a much faster rate in the fourth quarter than expected. Japan's economy shrank an annualized 2.3% in the October-December period, the fourth contraction in the past five quarters. Economists had expected a decline of 1.6%. Slowing manufacturing and a strong yen contributed to the weak reading.
read more: Olympus Wealth Management
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