VIENNA (dpa-AFX) - The euro slumped versus the dollar on Friday, falling further from a monthly high as Germany continued to take a hard line on rescue terms for profligate Greece.
Progress was made toward assistance for Greece when officials in Athens pledged new austerity measures and faster privatization.
However, German officials insist that private bondholders share the Greek risk. The European Central Bank has warned that a restructuring involving private investors would cripple the fragile European banking sector.
A formal deal is not expected to be reached until a European Union summit on June 23-24.
The euro has suffered from the uncertainty surrounding Greece, dropping to $1.4442 from this week's monthly high near $1.47.
Additional pressure was put on the euro yesterday, when European Central Bank President Jean-Claude Trichet signaled policy makers would take a wait and see approach following a modest interest rate hike in July.
The markets had been pricing in a series of rate hikes starting this summer.
The euro firmed a bit versus the sterling, briefly touching CHF 0.8920 compared to yesterday's weekly low of GBP 0.8845.
British industrial output fell more than expected in April due to extra public holidays and supply chain disruptions caused by the Japanese earthquake and tsunami, official data showed Friday.
The index of industrial production dropped 1.7 percent month-on-month compared to an increase of 0.2 percent in March, according to figures published by the Office for National Statistics. Economists were expecting output to remain flat in April.
The euro was slightly weaker versus the Swiss franc, slipping to CHF 1.2170. With the modest decline, the euro stayed near a record low CHF 1.2050 set June 1.
In other economic news from Europe, German inflation eased for the first time in nine months in May, as the pace of increase in energy costs slowed, official figures revealed Friday. Nonetheless, inflation continued to stay above the central bank's target.
The latest report from the Federal Statistical Office showed that inflation, as measured by the harmonized index of consumer prices (HICP) slowed to 2.4 percent from 2.7 percent in April, confirming the preliminary estimate.
Despite a drop in the prices for imported fuel, U.S. import prices continued to rise for the eighth consecutive month in May, according to figures released by the Department of Labor on Friday. The import price index increased 0.2 percent in May following a 2.1 percent increase in April and a 3 percent increase in March.
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