The euro rose against the safe-haven yen and Swiss franc on Monday, as a new Greek offer for a cash-for-reforms deal raised hopes of an agreement between the debt-laden country and its creditors, boosting investors' risk appetite. 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 1140 GMT 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 1700 GMT. "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. 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.
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