The euro briefly fell to a six-week low against the dollar Monday as traders had their first chance to react to the weekend arrest of the International Monetary Fund's managing director Dominique Strauss-Kahn on charges he sexually assaulted a maid in his hotel room.
However, the selling pressure did not last long and the euro was trading up 0.4 percent Monday midmorning in London at $1.4132. Earlier, during Asian trading hours, the single currency had fallen as low as $1.4046, its lowest level since March 29.
Analysts said the arrest of Strauss-Kahn in New York was unlikely to derail a (EURO)78 billion bailout of Portugal or alter discussions about whether Greece will need any more aid, on top of last year's (EURO)110 billion financial rescue.
European finance ministers are meeting over the coming two days in Brussels, with Portugal and Greece topping the agenda. Strauss-Kahn had been due to join them after a scheduled meeting Sunday with German Chancellor Angela Merkel, whose stance on Europe's debt crisis is crucial. Nemat Shafik, a deputy managing director who oversees IMF work in several EU countries, will take Strauss-Kahn's place at the Brussels get-together.
"We doubt his arrest will change the course of negotiations," Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ, said of Strauss-Kahn. "The key aspect of agreeing another bailout for Greece lies with the eurozone finance ministers and not the IMF."
The euro members, notably Germany, have contributed the lion's share of Europe's bailouts to Greece and Ireland and the upcoming Portuguese handout. Though the IMF has also stumped up billions of euros _ it provides around a third of the bailout funds _ its main purpose has been in giving the austerity programs credibility. Strauss-Kahn has been a key advocate of the strategy.
The IMF has named John Lipsky, Strauss-Kahn's deputy, as acting leader and said it remains "fully functioning and operational" despite Saturday's arrest of its managing director. Strauss-Kahn is due to appear in court later Monday for formal charging following medical and forensic tests.
For Portugal, ministers will consider some amendments made by Finland as a condition of approving the aid despite skepticism from key political parties. They include a firmer commitment from Portugal to privatize assets to help pay for the bailout.
Discussions of Greece will likely not lead to a detailed announcement of potential new aid measures, although there is growing acceptance that last year's bailout was not enough.
Ministers won't make any firm commitments before a mission of experts currently in Athens conclude their review of the implementation of the existing program and determine how much more money the country may need in the coming years.
However, Monetary Affairs Commissioner Olli Rehn and the President of the European Central Bank Jean-Claude Trichet were expected to brief ministers on the initial findings of the review.
Gabriele Steinhauser in Brussels contributed to this story.