Investing.com - The euro was steady against the dollar on Wednesday amid hopes for a plan to avoid Greek bankruptcy and an exit from the euro zone after European leaders gave Athens a five-day deadline to come up with a new bailout deal.
EUR/USD was at 1.1006, holding above the one-month trough of 1.0915 hit on Tuesday.
At an emergency euro zone summit on Tuesday evening European leaders handed Greece an ultimatum - it has five days to strike a new bailout deal with its euro zone creditors or face a banking collapse.
The Greek government was to present a formal application later Wednesday for a new rescue package from the European Stability Mechanism, the euro zone’s permanent bailout fund.
If an agreement cannot be reached in time, European Union leaders will hold an emergency summit in Brussels on Sunday to discuss how to contain the fallout from a Greek exit from the euro zone.
Greek banks were set to remain closed through Wednesday after capital controls were extended, amid concerns that lenders are close to running out of cash. Banks have been shuttered since last Monday, with ATM withdrawals limited to €60 per day.
The ECB said Monday that it would keep its emergency liquidity assistance to Greece capped at levels announced last Monday.
However the ECB demanded that Greek banks put up more assets as collateral to secure the emergency funding, adding to pressure on Athens.
The euro was close to one-month lows against the yen and was also lower against the Swiss franc, with EUR/JPY down 0.71% to 133.98 and EUR/CHF sliding 0.14% to 1.0405.
The safe haven yen rallied as Asian equity markets tumbled overnight, as a broad based selloff in Chinese stocks continued.
USD/JPY was down 0.73% to 121.65, the lowest level since May 26.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.81, little changed for the day.