Euro struggles to stay above $1.300 level

The euro struggled to stay above the $1.300 level against the dollar in Asia today after sliding from a three-week peak on news that an offer by private creditors to restructure Greek debt had been rejected by euro zone finance ministers, which served to keep default fears alive.

The euro was down to as low as $1.2987 before steadying at $1.3005. Yesterday had seen it rise over 1 per cent to a high of $1.3053 on the EBS trading platform as hopes of an eventual Greek deal fueled a wave of short-covering.

According to analysts, the euro's moves were familiar, with positive news leading some to cover their short positions, followed by a correction as investors sold into the rallies.

The euro hit a session low after a report gave rise to renewed fears that Portugal, seen to be a risky prospect in the euro zone, could be the next potential default candidate following Greece.

Many Asian centres were closed for the Lunar New Year holidays, which led to thinner than usual volumes amplifying market moves, according to traders.

Meanwhile, Germany's denial of a report that it would help boost the combined firepower of the euro zone's rescue funds to €750 billion further dampened optimism.