Investing.com - The dollar rose against the other major currencies on Monday as investors turned their attention to prospects for higher U.S. interest rates later this year after euro zone leaders reached an agreement on a new bailout for Greece.
Euro zone leaders reached a unanimous agreement after marathon all-night talks over a third bailout deal for Greece, European Council President Donald Tusk said Monday.
The Greek parliament must pass new legislation on Monday and Tuesday to implement the measures agreed in Brussels, including on pensions reform and a new sales tax regime.
Parliaments in several euro zone countries will also have to approve any new bailout.
Eurogroup President Jeroen Dijsselbloem said talks on bridge financing for Greece will begin immediately, to help cover its debt repayments this summer.
He also said that €50 billion of state owned Greek assets would be set aside in a fund to contribute to the recapitalization of Greek banks.
The euro briefly touched session highs before giving up gains and turning lower.
EUR/USD was last at 1.1076, off highs of 1.1197, while EUR/JPY slid 0.26% to 136.77.
The dollar rose to one-and-a-half week highs against the yen, with USD/JPY up 0.58% to 123.47.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.62% to 96.54.
The dollar was boosted as the threat of a Greek exit from the euro zone dissipated, removing a potential obstacle from Federal Reserve plans to tighten monetary policy.
Fed Chair Janet Yellen said last Friday that the central bank was on track to raise interest rates at some point this year.
Investors were looking ahead to her testimony on the semiannual monetary policy report later in the week for any further indications on the timing of an initial rate hike.
The greenback also gained ground against the Swiss franc but was lower against sterling, with USD/CHF up 0.87% to 0.9467 and GBP/USD gaining 0.38% to trade at 1.5558.
The commodity linked currencies were broadly lower. AUD/USD slid 0.22% to 0.7426, NZD/USD dipped 0.07% to 0.6710 and USD/CAD advanced 0.55% to 1.2726.
Earlier Monday official data showed that Chinese exports rose 2.8% in June from a year earlier, but imports fell 6.1%, pointing to weakening domestic demand.
The report underlined expectations that Beijing may further loosen policy to shore up the Chinese economy.