TOKYO: The euro rose against other major currencies on Monday as new reform proposals by Greece fuelled optimism that Athens may be able to clinch a bailout deal with its creditors and avoid defaulting on its debt.
The single currency climbed to $1.1396 and 139.87 yen in Tokyo from $1.1349 and 139.23 yen in New York late Friday. The dollar fetched 122.73 yen against 122.69 yen in US trade.
Eurozone leaders were set to hold an emergency meeting later Monday.
Athens put forward new proposals to its creditors ahead of the crunch summit, offering a ray of hope that a deal to end the country’s debt crisis can be struck after five months of deadlock.
“It is difficult to forecast how the summit will turn out but it seems there is no small deal of optimism in markets that they will come to an agreement in the end,” said Shinya Harui, a Europe-focused financial markets analyst at Nomura Securities in Tokyo.
It is not clear what concessions have been offered by either side, but
Greek premier Alexis Tsipras detailed what his office called a “mutually beneficial deal” in a phone call with German Chancellor Angela Merkel, French President Francois Hollande and European Commission President Jean-Claude Juncker.
Pressure is mounting to prevent Greece from defaulting on its debt, with a June 30 payment deadline approaching.
But Harui said the euro would drop only temporarily even if Greece defaults and drops out of the common currency.
“The euro would likely fall because of uncertainty over what would happen next,” he said.” But I believe the unit would later bounce back as a Greek exit would mean the euro is minus a negative factor.
“Given safety nets prepared by the [European Central Bank], it would not affect Italy, Spain or other southern European nations,” he said.
The dollar was lower against other Asia-Pacific currencies.
It slipped to 1,098.70 South Korean won from 1,106.94 won on Friday, to 63.46 Indian rupees from 63.79 rupees.
The greenback fell to 13,302.00 Indonesian rupiah from 13,317.30 rupiah, to 33.63 Thai baht from 33.66 baht, to Sg$1.3306 from Sg$1.3356 and to Tw$30.72 from Tw$30.78.
The Australian dollar rose to 77.84 US cents from 77.64 cents, while the Chinese yuan was at 19.76 yen against 19.81 yen. AFP