Asian session: The euro fell to its lowest level in more than three months

01:30 Australia Home Loans March -2.5% -1.7% +0.3%

02:25 Australia RBA Assist Gov Lowe Speaks -

06:00 Japan Prelim Machine Tool Orders, y/y April +2.4% +0.5%

The euro fell to its lowest level in more than three months as European officials begin to weigh the prospect of Greece withdrawing from the currency union.  The 17-nation euro weakened versus most of its 16 major counterparts before Greek President Karolos Papoulias is set to continue discussions with political party leaders on forming a national unity government. Greece’s Papoulias will meet with party leaders today, state-run NET TV said, without citing anyone. Syriza’s Alexis Tsipras, who heads the largest anti-bailout party and rejected a unity government following last week’s inconclusive elections, won’t attend the meeting, NET TV reported. Greece may face new national elections unless a government is formed.

In Germany, Chancellor Angela Merkel’s Christian Democratic Union party received its weakest share of the vote since World War II in a North Rhine-Westphalia ballot yesterday. The state is Merkel’s biggest electoral test this year before the federal vote due in the second half of 2013. She is due to give a press conference on the election results today in Berlin.

A report due today may show the euro area’s industrial production growth moderated in March. Europe’s shared currency also weakened before a report that may show industrial production in the 17-nation region rose 0.4 percent in March after a revised increase of 0.8 percent in the previous month, according to the median estimate in a Bloomberg News survey. The European Union’s statistics office reports the figures today. From a year earlier, output is predicted to have decreased 1.4 percent.

The Australian dollar declined even after the People’s Bank of China said May 12 that reserve ratios will fall 50 basis points, effective May 18. That was the third reduction in six months. China is Australia’s largest trading partner.

China’s reserve ratio cut “provided some support to the Aussie,” said Emma Lawson, a currency strategist in Sydney at National Australia Bank Ltd. (NAB) “But I think broader global concerns around Europe are probably a stronger driver for today.”

EUR/USD: the pair fell, updated a monthly low.

GBP/USD: the pair traded in a range $1.6050-$1.6085.

USD/JPY: the pair rose above Y80.00.

European data for Monday starts at 0900GMT, at the same time as EMU industrial output data. At 1100GMT, German Chancellor Angela Merkel gives a press conference in Berlin, which follows elections in the region of North Rhine Westphalia at the weekend.