I WORLD FOREX NEWS :- Euro Falls On Lack Of Greek Resolution

The euro fell Friday, after a closely-watched European Union finance ministers meeting failed to produce an agreement on how to resolve the Continent's intensifying debt woes.

A meeting in Wroclaw, Poland, between euro zone finance officials exposed the deep divisions that have characterized efforts to prevent Greece's financial issues from reverberating across the world economy. With investors seeking resolution to the long-running saga, ministers postponed until next month a decision to release more money to the cash-strapped Hellenic republic.

Despite a surprise move Thursday by five major central banks to flood European banks with dollars, markets are still unconvinced that the financial distress battering markets will be alleviated anytime soon. In addition, all euro zone parliaments must ratify a move to increase the size of the European Financial Stability Fund, and the outcome is far from guaranteed.

"Greece has a substantial problem, perhaps an insoluble one," said David Feldman, President and co-chief investment officer at investment firm Palladiem Partners, L.P. "I don't see an easy exit for them."

The lack of a permanent solution means the probability of a disorderly default are "uncomfortably close to 50/50," he added. That would heap further pressure on the euro, which just this week sank to a near seven-month low below $1.35.

Late Friday, the euro was at $1.3802 from $1.3875 late Thursday, according to EBS via CQG. The dollar was at Y76.82 from Y76.70, while the euro was at Y105.91 from Y106.45. The U.K. pound was at $1.5788 from $1.5804. The 0.8763 from CHF0.8693.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 76.552 from about 76.277.

U.S. Treasury Secretary Timothy Geithner attended the EU meeting Friday. He called on euro zone nations to overcome damaging divisions and remove "catastrophic risk" from markets.

EU finance chiefs did agree on a compromise to increase economic governance and prevent another crisis. However, they failed to give investors any clarity on the current crisis menacing Greece and threatening Italy and Spain.

Italy--the euro zone's third largest economy--just passed a package of austerity measures designed to prevent investors from punishing its sovereign debt in the same manner of Greece, Ireland and Portugal. But analysts are nervously awaiting an imminent decision from Moody's Investors Service on whether Italy will suffer a downgrade of its sovereign credit rating.

"Italy is not Greece," said Steve Wyatt, finance chair of the Farmer School of Management at Miami University. But with its heavy debt and sluggish growth, "there's a real worry of infection into a place like Italy, which???has to get its fiscal house in order and needs breathing room."
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