The euro gapped lower at the start of trading early on Monday after a weekend emergency EU summit had still not ended with a deal when markets opened.
No news yet on the ‘final meeting on a Greece deal’ disappointed investors who had hoped for some kind of resolution by the end of Sunday.
EUR/USD dropped to a low of $1.109 compared to Friday’s close of $1.1152. Against the yen, the euro lost more than 1 percent to a low of 135.45 yen and dipped to 1.0425 Swiss francs from 1.0480 francs late on Friday. However, losses were soon recovered after the euro bounced back above $1.100 to as high as $1.1151 and 136.81 yen.
The catalyst behind the upside move in the euro were rumours that the European Central Bank had agreed to delay a Greek repayment of 3.5 billion euros that had been due on July 20.
The EU Summit was attended by all twenty-eight EU member states, who gave Greek Prime Minister Alexis Tsipras three days to implement reforms that the creditors require in exchange for a bailout funds.
Greece badly needs financial aid or risks running out of money soon, while the country’s banks have been closed the past two weeks and are entering the third week.
At the time of writing, the euro jumped higher to $1.1171 in reaction to the news that a deal has been reached. The Belgian Prime Minister announced this in a tweet just before 9am Brussels time.
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