Euro stable against dollar as Greek debt deal shows life

Euro stable against dollar as Greek debt deal shows life
Photo: Bloomberg

NEW YORK - The euro held steady against the dollar on Monday (Jun 22) as signs mounted that Greece was making some progress with creditors over its bailout after five months of deadlock.

Traders appeared cautiously optimistic that a deal with the European Union, the European Central Bank and the International Monetary Fund could be taking shape.

Eurogroup head Jeroen Dijsselbloem said on Monday that Athens's new proposals to reach a deal were "a welcome step and a step in a positive direction, so I think it is also an opportunity to get that deal later this week and that is what we will work for".

Greece offered economic reforms in exchange for the last payment of €7.2 billion (US$8.2 billion) from the current program. Without that money, Greece may not be able to make a €1.5-billion (US$1.7 billion) repayment to the IMF due on Jun 30, risking a default and possible chaotic exit from the eurozone.

"If the anecdotes are correct, the odds of a deal are higher than they were late last week but still are barely better than 50-50," said Moody's Analytics.

The prospect of a Greek deal pushed European equity markets sharply higher, while Wall Street stocks had a good day, sending the Nasdaq to a new record close.

"It looks like Greeks are going to give ground on actions on spending and it may just be enough to get to the finish line," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

The euro traded at US$1.1340, little changed from its Friday level of US$1.1349.

"Interestingly, the FX market only seems marginally interested in what is going on in Greece," said Kathleen Brooks of Forex.com.

"This headline-driven activity is likely to last until a final decision has been made on Greece, which should happen by the end of this week ... Expect plenty of volatility, especially in the stock markets," she said.

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