The euro surged on Monday amid reports a deal between Greece and its creditors was reached.
According to the latest reports, Greece and its creditors have just reached a deal after talks dragging on for 17 hours with the question on liquidity to cash-starved banks pending.
President Donald Tusk twitted:
"EuroSummit has unanimously reached agreement. All ready to go for ESM programme for #Greece with serious reforms & financial support."
Austria’s chancellor Walter Faymann has meanwhile warned that it will be “very difficult” to implement the agreement, but it should be a positive result for Greek social cohesion.
Finance ministers will now begin urgent talks on discussing bridge financing for Greece.
At a press conference going on right now, Eurogroup president Jeroen Dijsselbloem has told that €50bn of Greek assets will be transferred to a new fund.
Greece needs a total of €7 billion before July 20 to cover its financing needs, with €3.5 billion of that amount being owed to the European Central Bank.
The newly established fund will contribute to the recapitalisation of Greek banks, however, it will be based in Athens, not Luxembourg as originally planned.
The Greek parliament must immediately start passing legislation to implement the measures agreed in Brussels. If Athens does that on Tuesday and Wednesday, then the Eurogroup can take a view on Wednesday, and then national parliaments can give their own approval for a third bailout. Then the firm negotiations can take place over a new bailout from the ESM (where the issue of debt restructuring can also take place).
In other news, China's trade surplus reached $46.6 billion in June, while imports in U.S. dollar terms fell 6.1%, a better showing that the 15% drop expected year-on-year. Exports gained 2.8%, a good boost above the 0.2% fall seen.
EUR/USD traded at 1.1165, up 0.05%.
USD/JPY was last at 123.16, down 0.32%.
AUD/USD was quoted at 0.7458, higher 0.17%.
