* France says barriers to Greece deal remain
* Chinese tightening fears, premier comment weigh on risk
* Investors cautious ahead of Fed, BoJ meetings
(Updates prices, adds quote, changes byline)
By Wanfeng Zhou
NEW YORK, March 15 (Reuters) - The euro fell against the
dollar on Monday, weighed down by a lack of concrete progress
on a financial aid package for debt-strapped Greece.
Concerns about further tightening by Chinese monetary
authorities also stoked worries about a global recovery,
denting investors' appetite for risk and driving
higher-yielding currencies like the Australian dollar lower.
The European Union's executive said on Monday it was ready
to propose a framework that could be used to aid Greece, but
France and Germany continued to show reluctance and officials
signaled that no figure would be put on the amount of help that
could be extended. For more, see [ID:nLDE62E0NZ]
"The Greek debt crisis will continue to hang over the euro
like the Sword of Damocles," said Chris Gaffney, vice president
at EverBank World Markets, in St. Louis, Missouri.
"Only time will tell if the Greeks will be successful in
their efforts to refinance their debts," he added. "Until some
other event or crisis draws (currency speculators') attention,
the euro will continue to be fairly volatile."
In afternoon trading, the euro was down 0.7 percent
at $1.3667, retreating from a four-week high just shy of
$1.3800 hit on Friday.
Traders said there were reports in the market of large
option-related sell orders on the approach to $1.3800, limiting
any upside momentum on the euro.
The ICE Futures' dollar index <.DXY> traded up 0.5 percent
against a basket of currencies at 80.261 as weakness in global
stock markets boosted demand for the safe-haven greenback.
Comments by Chinese Premier Wen Jiabao on Sunday, who
rejected calls by the international community to revalue the
yuan, saying its currency is not undervalued, unsettled the
market, analysts said. [ID:nTOE62D001].
Also on Monday, Moody's said the credit ratings of the
United States, UK, France, Germany and Spain were safe but
risks to their top-notch status had grown. [ID:nLDE62B1T5].
FED MEETING LOOMS
Investors also stayed cautious ahead of monetary policy
meetings by the Federal Reserve and Bank of Japan this week.
The U.S. central bank is expected to reiterate its pledge
to keep interest rates very low for an "extended period" at the
end of its meeting on Tuesday, but market participants will
closely watch the number of dissenters.
Kansas City Fed President Thomas Hoenig dissented at the
Fed's last meeting, saying conditions had improved sufficiently
to warrant dropping the "extended period" phrase.
"There's clearly a growing debate within the Fed as to how
long that language should be maintained," said Fergal Smith,
managing market strategist, Canada at Action Economics in
Toronto. If another Fed official dissented or the accompanying
statement showed a "more hawkish or less dovish" slant, the
dollar could benefit, he added.
Against the yen , the dollar fell 0.1 percent to
90.34 yen.
Sterling was the day's biggest mover, falling nearly 1.0
percent against the dollar to $1.5039 after hitting
session lows of $1.5019 on persistent worries about a weak UK
economic outlook and on uncertainty ahead of a general election
expected in May. [GBP/]
The Bank of Japan starts a two-day meeting on Tuesday at
which, sources said, it is leaning towards easing monetary
policy again. [ID:nTOE62A08Z]
The euro also hit a low of 1.4509 Swiss francs ,
according to Reuters data, its weakest level in more than 16
months. It was last at 1.4527 francs, down 0.2 percent.
(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by
Kenneth Barry)
