The dollar is gaining ground against both the Euro and the Japanese Yen at the start of the new trading week and is recovering from its early losses against the pound sterling. Greece continues to dominate the headlines, after Eurozone leaders unanimously reached an agreement to start talks for a third bailout programme for Greece.
However, traders may be reluctant to make any significant moves ahead of the release of some key economic data in the coming days, including reports on retail sales, inflation, and housing starts.
Federal Reserve Chair Janet Yellen’s will also give her semi-annual congressional testimony this week. Yellen will appear before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
Euro zone ministers have given Greece until Wednesday to pass new laws, including tax and pension reforms, to help avoid losing access to the common currency bloc.
In a message on his official twitter account, European Council President Donald Tusk said, “EuroSummit has unanimously reached agreement. All ready to go for ESM [European Stability Mechanism] programme for Greece with serious reforms & financial support.”
Speaking at the press conference following the meeting, European Commission President Jean-Claude Juncker said, “There is no Grexit…I am satisfied both with form and substance of the agreement”. He also said that the emergency talks that led to the deal were “laborious”.
“We had only one objective: to reach an agreement. After 17 hours of negotiations, we have finally reached it. One can say that we have ‘agreekment’,” Tusk said at the press conference.
While stating that Greece needed to undertake some essential reforms, German Chancellor Angela Merkel said the advantages of the latest deal outweighed its negatives. She also noted that Greece had repeatedly pointed out that it wants to remain in the eurozone.
Merkel also expressed belief that Greece can regain trust and saw no need to call for a vote of confidence in the German parliament over the new deal. However, she ruled out any ‘debt haircut’ for Greece. Meanwhile, the EU said a debt payment extension may be considered.
The dollar slipped to an early low of $1.1196 against the Euro Monday, but has since climbed to a 2-day high of $1.10.
The buck dropped to a 4-session low of $1.5588 against the pound sterling this morning, but has since bounced back to around $1.5485.
The greenback has extended its gains against the Japanese Yen to a third consecutive session and has risen to a week and a half high of Y123.400, from a low of around Y120.400 last Wednesday.
Japan’s industrial production dropped less than initially estimated in May, latest figures from the Ministry of Economy, Trade and Industry showed Monday. Industrial production declined a seasonally adjusted 2.1 percent month-over-month in May, revised down from a 2.2 percent drop in the flash data. In April, production had risen 1.2 percent.
The material has been provided by InstaForex Company – www.instaforex.com