Dollar hits one-month high as markets await Tsipras's new reform proposals
On Tuesday the greenback climbed to fresh 1-month highs against its peers, as demand for the safe-haven greenback
remained underpinned ahead of a euro zone summit scheduled later in the
day and aimed at restarting negotiations between Greece and its lenders.
Greece's lenders are to remain closed as capital controls were extended until Wednesday. Banks have been shut since last Monday, with ATM withdrawals limited to €60 per day.
The European Central Bank announced Monday that it would keep its emergency liquidity assistance to Greece unchanged at levels announced last Monday.
The ECB added more pressure on Greece as it signaled it will adjust the haircuts on collateral accepted by the Bank of Greece as part of the ELA.
Markets now await Greece to present new economic reform proposals to eurozone
finance ministers, who are meeting in Brussels Tuesday to discuss the
situation after Sunday’s referendum.
Last Sunday, around 61% of of Greek
voters rejected austerity measures the country’s creditors had put
forward in a proposal to unlock more bailout aid.
It seems “unlikely that Sunday’s referendum will have swayed the creditors to the extent that their ‘red lines’ have moved enough to get a deal across the line,” Joshua Mahony, market analyst at IG, said in a note. “The two sides arguably seem further away than ever.”
The U.S. dollar index was last at 96.877 gaining 0.60%.
The euro plunged below $1.10, losing 0.7% to buy $1.0974. Against the yen, the shared currency dropped 0.8% to ¥134.44.
The pound sterling was lower vs the dollar, with GBP/USD down 0.70% to 1.5498.
Earlier, the U.K. Office for National Statistics said in a report that industrial output climbed 0.4% in May, compared to expectations for a decline of 0.2%. The manufacturing sector remained soft, with output dipping 0.6% after a 0.4% drop in April.
Industrial production increased by 2.1% on a year-over-year basis - the biggest yearly growth since April of 2014, and manufacturing was up 1.0%.
