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Euro
zone leaders began an emergency summit on Monday, with EU
officials welcoming the proposals as a "good basis for progress"
to avert a Greek default. The Greek stock market jumped nearly 7
percent and European shared surged.
The euro, whose resilience has surprised many in the face of
growing worries that Greece could default and leave the euro
zone, gained 0.4 percent to 139.85 yen. Against the Swiss franc
it was also up 0.4 percent at 1.0457 francs.
"The Greek crisis is not a burden for the euro," Commerzbank's
head of FX research in Frankfurt, Ulrich Leuchtmann, said.
"There is some impact (from the news) ... particularly because
everyone is wondering what the rest of the market thinks about
this newsflow, and this is creating some volatility."
"But I still find it astonishingly small, what we're seeing in
terms of euro exchange rate reactions."
The single currency had earlier risen as high as $1.1404 after
the European Union welcomed Athens' new proposals, but gave up
those gains as the dollar strengthened broadly. By 7.40 a.m EDT
the euro was 0.1 percent down on the day at $1.1339.
Greek Prime Minister Alexis Tsipras heads into a series of talks
with figures including ECB President Mario Draghi and IMF head
Christine Lagarde on Monday before a summit in Brussels of euro
zone government leaders at 1 p.m. EDT.
"It sounds like Greece has a proposal that Greece will be taking
to the euro area summit today," Barclays currency strategist,
Hamish Pepper, said. "The important thing will be whether we
actually see a positive response from the euro zone leaders when
they meet this evening."
Boosted by its gains against the euro, the dollar climbed 0.2
percent against a basket of currencies to 94.272 <.DXY>.
Many investors remained cautious because it was not immediately
clear how far the new proposals yielded to creditors' demands
for additional spending cuts and tax hikes, nor whether
creditors can stomach the offer.
Speculation was also rife that, if no deal were reached on
Monday, Greece may need to impose capital controls on Tuesday to
avert a banking crisis as savers keep withdrawing funds.
(Additional reporting by Tomo Uetake in Tokyo; Editing by Louise
Ireland)
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