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But fresh memories of the global credit crunch are making financial institutions cautious about lending to those who may have big exposure to debt-ridden countries or banks in the euro zone, they said. Analysts said the move highlighted weakness in the European banking sector and heightened worries that more banks in the euro zone may need to be bailed out. That is likely to see more investors fleeing the euro.
The euro slid 0. The euro has lost over 7 percent against the dollar so far this month and is heading for its biggest monthly fall since January at current prices. The U. DXY , which tracks the greenback against a basket of six currencies, was steady at Against the yen, the dollar stood at The euro fell 0. The European single currency fell as low as But the likelihood of a Greek default on a 1. Greek Prime Minister Alexis Tsipras shocked European officials by instead calling for a referendum to be held on July 5 to ask Greek voters to decide on whether to accept the bailout terms which his government opposes.
Athens also closed banks and imposed capital controls to prevent a collapse of its banks as anxious investors pulled out their cash. Some investors had begun paring bets on the euro even before the situation reached its latest crisis point, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. Against the Swiss franc, the euro fell as low as 1.

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