* Euro zone, IMF clash over Greek debt target date
* Greece to roll over T-bills on Tuesday to avoid default
* Another euro zone meeting planned on Nov 20
* Dollar index hits two-month high
By Philip Baillie
LONDON, Nov 13 The euro fell to a two-month low
against the dollar on Tuesday after international lenders
stopped short of giving further aid to debt-stricken Greece,
denting the single currency's short-term outlook.
The euro fell 0.3 percent to $1.2666, its lowest
since Sept. 7. It also hit a one-month low against the yen
of 100.35 yen.
More losses could see the euro head towards support at
$1.2640, its 100-day moving average, although traders said a
reported options expiry at $1.27 could keep it close to that
level and limit its falls.
Euro zone finance ministers agreed to grant Athens two more
years to reach its budget goal. But the IMF and the euro zone
were at loggerheads over a longer-term target date to shrink the
country's debt pile.
"It's clear the euro is under some pressure and just looking
at how the bond markets are playing out this morning, with
German and Spanish yield spreads widening, that is building
uncertainty and negativity once again," said Jeremy Stretch,
head of currency at CIBC world markets.
"The open dispute between the euro zone and the IMF is
hardly encouraging ... so it looks like the euro is going to
remain on the defensive."
The euro's falls helped the dollar rise to a two-month high
against a basket of currencies, with its index hitting
The euro has fallen steadily since hitting a peak of $1.3140
in mid-October as the euphoria over a European Central Bank
bond-buying scheme faded.
While market players expect Greece to get by this week
without the aid money it was counting on, uncertainty over its
short-term financing and long-term debt reduction plan was
enough to put off investors.
Greece was due to sell treasury bills on Tuesday to
refinance a 5 billion issue maturing on Friday.
Investors will also look to Germany's ZEW sentiment survey
for November at 1000 GMT. A weak reading may add to selling
pressure on the euro.
Eurogroup Chairman Jean-Claude Juncker said on Monday
another Eurogroup meeting would take place on Nov. 20, before
the EU summit from Nov. 22, though officials said more talks
could be required the week after that to nail down a new deal.
"Few people would think that the euro zone will desert
Greece. Still, the market will be frustrated by lack of a clear
picture. I expect the euro to keep falling gradually," said
Ayako Sera, senior market economist at Sumitomo Mitsui Trust
Bank in Tokyo.
ANOTHER FISCAL PROBLEM
On top of euro zone concerns, worries about recession in the
United States if policymakers in Washington fail to resolve the
fiscal cliff of automatic spending cuts and higher tax rates due
to kick in early next year undermined risk appetite.
This weighed on equity markets and helped the dollar against
riskier currencies. It hit a two-month peak against the Swiss
franc of 0.9511 francs.
However, the U.S. currency fell against the safe-haven
Japanese yen, losing 0.25 percent to 79.26 yen though it
stayed above a 3 1/2-week low of 79.07 yen hit on Friday.
The yen often tends to outperform when risk appetite wanes
because of Japan's net creditor status.