The euro dropped to its lowest level since 2001 against the yen and slid versus the dollar as speculation German Chancellor Angela Merkel is preparing for a Greek default curbed demand for the 17-nation currency.

The Dollar Index, which tracks the greenback against six U.S. trading partners, climbed to an almost seven-month high as fresh Greek austerity plans failed to calm financial-market stress in the euro area. The yen advanced at least 1 percent versus all of its 16 major peers. The Australian and New Zealand dollars weakened as stocks slumped and amid reports France's three largest banks may have their credit ratings lowered.

"There's always the underlying risk of a Greek default," said Chris Walker, a foreign-exchange strategist at UBS AG in London. "Markets are pricing that in right now."

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