Euro falls to one-week low on Greek jitters

The euro fell to a one-week low against the dollar on Friday on concerns that a crucial meeting on Greece's request for a six-month loan extension could end without easing the country's funding crisis.

Reports suggesting that Greece and its euro zone creditors were getting closer to a deal appeared to do little to calm investors, with the safe-haven yen gaining 0.8 percent against the euro to trade at 134.125 yen.

A German magazine report that European Central Bank officials were preparing contingency plans for keeping the rest of the euro zone intact in the event of a Greek exit briefly pushed the euro below $1.13 against the dollar, before it recovered a touch to trade at $1.13165, down 0.5 percent on the day.

Meanwhile, Germany said Greece's latest debt proposal was a "good signal" although it did not go far enough in its present form.

"The risk is, with some of these slightly positive headlines starting to appear, that we kick off Monday morning still with no apparent resolution," said Adam Cole, global head of FX strategy at RBC Capital Markets in London.

"The kneejerk reaction is the euro lower on that," he said adding that "it could potentially get messy."

Greece's EU/IMF bailout program expires on February 28, and Prime Minister Alexis Tsipras, who won power promising to ditch the bailout, needs to secure a financial lifeline to keep the country solvent beyond late March.

So far, guarded optimism has prevailed in the market, chiefly on the grounds that failure to strike a deal would be too costly for both sides. It could lead to Greece's defaulting on its debt and exiting the euro zone.

"The reason that the euro is not lower is that a lot of people still have this sanguine view that there will be an...