Investing.com - The dollar strengthened against the other major currencies on Monday as markets reacted to news that euro zone leaders reached an agreement on a new bailout for Greece.
Euro zone leaders reached a unanimous agreement on a third bailout deal for Greece earlier Monday, following marathon weekend-long talks.
The Greek parliament must now pass new legislation by Wednesday to raise sales taxes, cut pension payments and enforce automatic spending cuts if the next budget misses its targets before negotiations on a third bailout program can begin.
Parliaments in several euro zone countries will also have to approve any new bailout.
The euro briefly touched session highs before giving up gains and turning lower.
EUR/USD was last at 1.1016, down 1.25% for the day, off highs of 1.1197, while EUR/JPY was down 0.76% to 136.00.
The dollar rose to one-and-a-half week highs against the yen, with USD/JPY up 0.56% to 123.45.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.96% to 96.89.
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 remained slightly lower against sterling, with USD/CHF up 1.15% to 0.9493 and GBP/USD up 0.15% at 1.5521.
The commodity linked currencies were broadly lower. AUD/USD was down 0.71% to six year lows of 0.7391, NZD/USD fell 0.43% to 0.6686 and USD/CAD advanced 0.88% to 1.2766.