The euro slipped against the dollar on Monday, as many investors took a pessimistic view of the latest round of euro zone talks on a cash-for-reform deal for Greece.
Greece, which must repay a 750 million euro loan to the International Monetary Fund on Tuesday, faces the risk of defaulting on debt repayments and being forced out of the euro zone. Negotiations have moved slowly and its lenders have ruled out a decisive agreement at Monday's meeting of euro zone finance ministers in Brussels.
Though Athens is hopeful of a positive statement from the Eurogroup meeting, Greece and its EU and IMF lenders remain at odds over budget, labor and pension issues.
The euro fell half a percent to $1.1157 EUR=, well below the two-month peak of $1.1392 struck on Thursday when the outlook for the European economy thawed and euro zone bond yields rallied.
"They (the Greeks) are going to make their next payment but even so ... I get the feeling in the market that there are increasingly more people who are positioning for a Grexit," said Adam Myers, European head of FX strategy at Credit Agricole in London.
"More and more people seem to be taking a pessimistic view. That wasn't there even a month ago."
New Zealand's dollar was the biggest mover among major currencies, skidding as much as 1.5 percent against its U.S. counterpart to a seven-week trough of $0.7372 NZD=D4 as speculation that the country's central bank could cut rates gathered momentum.
The Reserve Bank of New Zealand hinted last month it might cut rates if the economy slowed and inflation stayed low.
Against the yen, the U.S. dollar stood little changed at 119.905 JPY=, after Friday's mixed U.S. jobs data failed to offer much of a buying incentive.
The U.S. non-farm payrolls numbers showed a rebound in April, but a significant downward revision to the March figure, and weaker-than expected wage growth. That supported bets that the Fed will not begin hiking rates until late in 2015.
Following last week's unexpected outright win for the Conservatives in Britain's parliamentary elections, sterling stayed close to a 2-1/2-month high, edging down 0.2 percent to $1.5419 GBP=D4.
"With the UK elections over, attention will shift back towards fundamentals and Bank of England policy and whether it can head towards hiking rates," Kadota at Barclays said.
With optimism building that the United States is already recovering smartly from another horrible start to the year, focus will shift this week to reports that may show the euro zone is finally shaking off half a decade of torpor.