EU session review: Euro falls as Juncker says Greek default is possible

Data released
06:58     France     PMI (July) flash    50.1    53.0    52.5
06:58     France     PMI services (July) flash    54.2    56.7    56.1
07:28     Germany     PMI (July) flash    52.1    54.0    54.6
07:28     Germany     PMI services (July) flash    52.9    56.1    56.7
07:58     EU(17)     PMI (July) flash    50.4    51.5    52.0
07:58     EU(17)     PMI services (July) flash    51.4    53.2    53.7
08:00     EU(17)     Current account (May) unadjusted, bln     -18.3    -    -6.5
08:00     EU(17)     Current account (May) adjusted, bln     -5.2    -    -5.4 (-5.1)
08:30     UK     Retail sales (June)    0.7%    0.5%    -1.4%
08:30     UK     Retail sales (June) Y/Y    0.4%    0.3%    0.2%
08:30     UK     PSNCR (June), bln    21.0    -    11.1
08:30     UK     PSNB (June), bln    14.0    12.8    17.4

The euro fell against the dollar for the first time in three days after European officials signaled Greece may default on government bonds.
The 17-nation currency was weaker amid concern a summit won’t stop contagion from Greece spreading through Europe’s bond markets.
Luxembourg Prime Minister Jean-Claude Juncker said today he couldn’t rule out a so-called selective default on Greek debt.
“The word ‘default’ is still in these headlines; that, of course, is a bit disappointing,” said Jane Foley, a senior currency strategist at Rabobank International.
German Chancellor Angela Merkel and French President Nicolas Sarkozy reached an agreement on Greece after seven hours of talks in Berlin and details will be released at the summit in Brussels.
“I am not in charge of explaining if yes or no there will be a selective default,” Luxembourg’s Juncker told reporters today before the summit. “You can never exclude such a possibility, but everything should be done in order to avoid such a possibility.”
The Swiss franc fell against the dollar after Zurich-based newspaper Blick quoted Switzerland’s Economy Minister Johann Schneider-Ammann as saying the currency’s strength versus the euro is “alarming.”

EUR/USD was close to $1.4300, but failed to break above. Rate corrected to session lows around $1.4138 before recovered to $1.4190.

GBP/USD fell from the highs on $1.6200 to $1.6120 before it was back to $1.6170.

USD/JPY tested Y79.00 and retreated to Y78.80.

US Jobless claims comes at 12:30  GMT.
Later, at 14:00 GMT, Philadelphia Fed index for July is due to comes.