FOREX-Euro skids as Greek debt talks break down and keep markets guessing

* Euro down against peers, but losses limited for now * Markets disappointed as Greek talks end abruptly without deal Adds details, quotes By Ian Chua and Shinichi Saoshiro SYDNEY/TOKYO, Feb 17 Reuters - The euro skidded on Tuesday after a collapse in talks to secure a new debt deal for Greece raised the prospect of negotiations dragging on until the last possible minute and keeping markets guessing. The common currency was down 0.2 percent at $1.1330EUR= , from Monday's high of $1.1429 and back near the bottom of its prevailing $1.1270-1.1534 range. Trading overnight was relatively light with U.S. markets shut for a public holiday. The euro struggled near a one-week low of 133.96 yen EURJPY=R . Against sterling, it came within a whisker of a 7-year trough of 73.69 penceEURGBP=R set last week. It was last at 73.74 pence. Talks between Greece and euro zone finance ministers broke down when Athens rejected a proposal to request a six-month extension of its international bailout as "unacceptable". "All up, still no deal. And something of a disappointment after what seemed to be the makings of a spirit of compromise last week," said David de Garis, senior economist at National Australia Bank. Renewed weakness in the euro helped lift the dollar index to 94.459, from a one-week low of 93.899. On the back of risk appetite dented by the latest turn in Greek debt talks, the dollar slipped overnight to a 10-day trough of 118.110 yenJPY= from a high of 118.88. It last traded at 118.330. FLASHBACKS OF 2011 The collapse of the talks unsettled markets although the consensus appears to still favour a last-minute deal for Greece, which faces the risk of running out of funds by the end of the month, when its bailout package expires

"The market has witnessed this before - it remembers the brinkmanship during the Greek debt negotiations of 2011. There are only nine trading days left until the Feb. 28 deadline but some see that as enough time. Thus we are not seeing the euro sold in panic," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo. "On the other hand tail risk is definitely rising. This is limiting bargain-hunting of the euro by short-term players and the currency will remain under selling pressure." The next focus points in the debt saga will be on Wednesday and Friday

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