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By Bloomberg

The euro fell for a third day against the dollar amid speculation monetary policies in the U.S. and Europe will keep diverging, weakening the common currency even if Greece reaches a debt deal with its creditors.

The euro slid versus all of its 16 major peers as Goldman Sachs Group Inc. said the European Central Bank’s quantitative- easing program will send the currency toward parity with the greenback. The dollar gained after a surge in U.S. home sales on Monday revived bets the Federal Reserve will raise interest rates this year. Stocks and peripheral bonds rose amid optimism that Greece can soon strike a deal to avoid default.

“The view in the market is that policy divergence Europe and the U.S. will continue,” said Richard Falkenhall, a trading strategist at SEB AB in Stockholm. “Whether or not Greece has a deal, the ECB may have to step up its quantitative-easing program, weakening the euro. We maintain our view that the Fed will start tightening in the second half of the year, and expect the euro to trade towards parity by year-end.”

The euro fell 1.2 percent to $1.1205 at 8:33 a.m. New York time and declined 0.9 percent to 138.64 yen. The dollar rose 0.3 percent to 123.74 yen.

European leaders gave Greek Prime Minister Alexis Tsipras’s government 48 hours to make a final effort to satisfy creditors and end a five-month standoff. Leaders from Greece’s 18 fellow euro-area countries agreed to step up the pace of negotiations to secure a breakthrough on Wednesday that leaders can sign at the end of the week.

‘Quasi-Safe Haven’

The euro moving in the opposite direction as higher- yielding assets suggested the euro is seen by investors as a “quasi-safe haven,” according to Jane Foley, a senior currency strategist at Rabobank International in London.

“It follows that once risk appetite is restored that investors will again take advantage of the low interest rates that are prevalent through much of the Eurozone and use the euro to fund riskier trades in higher-yielding assets,” Foley wrote in an e-mailed note.

The euro has slumped 4.4 percent this year, the worst performer after New Zealand’s dollar among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

Greece is a catalyst for the euro to approach parity with the dollar “via stepped up QE that moves rate differentials against the single currency,” Goldman strategists including Robin Brooks in New York wrote in a report on June 22.

“The ECB will stay the course as far as QE’s concerned,” said Derek Mumford, director at Rochford Capital, a currency risk-management company in Sydney. “It’s amazing how one strong housing number turned around sentiment toward the U.S. dollar.”