Euro dips in Asian trade as Greek exit looms

The euro dipped in Asia on Monday after eurozone leaders set Greece a brutal ultimatum for a desperately needed bailout deal, as the cash-strapped nation's exit from the single currency loomed ever larger.

The common currency stood at $1.1129 after markets opened at 7:00 am (2200 GMT Sunday) in Tokyo, down from $1.1149 in New York late Friday.

In earlier electronic trading, the euro fell as low as $1.1089.

The unit was also weaker at 136.58 yen against 136.86 yen in US trade.

"Market reaction in the euro is surprisingly muted," said Steven Englander, global head of Group-of-10 currency strategy at Citigroup.

"The absence of agreement and toughness of terms are eye-catching, but investors are waiting for the outcome more than trying to anticipate it."

Hawkish Germany pushed for a Greek "time out" from the euro if leftist Prime Minister Alexis Tsipras fails to agree to tough take-it-or-leave-it terms for a three-year rescue plan worth up to 86 billion euros ($96 billion).

Greece said the plans were "very bad", but with its banks set to run dry in days it looked to have little choice but to bow to reform demands that effectively rob Athens of control of much its finances.

The dramatic weekend of backroom dealings in Brussels threatened to leave the European Union more divided than at any time in its 50-year history, and by a currency that was meant to bring it together.

"There will be no agreement at any price," German Chancellor Angela Merkel said as she arrived for the summit of 19 eurozone leaders, complaining of a loss of trust in Athens and warning of "tough negotiations" ahead.

Radical Greek leader Tsipras insisted Sunday a deal was possible "if all parties want it", adding that he was ready for an "honest compromise" on Greece's plans for tax cuts and pension reform.

Tsipras was elected in January vowing to end five years of austerity tied to two previous bailouts since 2010 that have left Greece with debt worth nearly 180 percent of its GDP, and he has since become a standard-bearer for leftist parties across the continent.

The tensions in Brussels were underscored when EU President Donald Tusk halted the summit midway for three-way talks between Tsipras, Merkel and French President Francois Hollande.

"What we can see is that the optimism with which markets were travelling into the weekend looks misplaced," Ray Attrill, co-head of forex strategy at National Australia Bank, said in a commentary early Monday.

The eurozone turned the screw after finance ministers finished two days of intense talks on Greece's reform proposals drawn up to satisfy its international creditors -- the EU, the European Central Bank and the International Monetary Fund.

The Greek parliament approved the plans on Saturday, despite them being similar to those rejected by Greeks in a controversial referendum on July 5.

-- Bloomberg News contributed to this report --