Tuesday, 14 July 2015 10:40
TOKYO: The dollar rose against the euro in Asian trade Tuesday after Greece reached a tentative new bailout deal, with investors’ focus now on the US Fed chief’s testimony this week.
On forex markets in Asia, the euro stood at $ 1.0986, slightly off from $ 1.1004 in New York late Monday.
The euro eased to 135.74 yen against 135.84 yen in US trade, while the dollar moved higher to 123.59 yen from 123.45 yen.
After gruelling 17-hour talks, Greek Prime Minister Alexis Tsipras accepted a series of tough reforms demanded by official creditors in exchange for new financing that will enable the country to avoid defaulting and avert a turbulent exit from the eurozone.
In the moments after the deal was announced, the euro jumped to nearly $ 1.12 but then steadily fell to the $ 1.10 level.
“Any reduction in concerns over Greece may simply clear the way for the Fed to begin raising US interest rates sooner and further than the markets currently anticipate,” Capital Economics said in its client’s note.
Federal Reserve Chair Janet Yellen said last week that the central bank will likely begin raising interest rates before the end of 2015.
“Expectations of a Fed rate-hike have propelled dollar buying this far,” Naohiro Nomoto, an associate for currency trading at Bank of Tokyo-Mitsubishi UFJ in New York, told Bloomberg News.
“Market players, expecting the Greek issue to drag on, are ignoring Greece and returning to dollar buying amid data and congressional testimony by Yellen this week.”
