Currencies: Euro finishes week higher against buck
The euro finished the week higher against the dollar on Friday after Greece offered concessions to its bailout proposal, stoking investors’ optimism that the country’s international creditors would likely accept the reform package.
The shared currency EURUSD, +1.0418% traded at $ 1.1130 late Friday in New York, compared with $ 1.1039 late Thursday, finishing the week up 0.34% against the dollar.
Greece’s troika of lenders—the other eurozone countries, the European Central Bank and the International Monetary Fund—will decide whether to approve the plan over the weekend.
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Trading in the euro could become much more volatile next week if Greece’s creditors reject the proposal. A rejection could possibly trigger a Greek exit from the monetary union, which would weigh on the euro’s value. Greece owes €3.5 billion ($ 3.8 billion) to the International Monetary Fund that will come due on July 20.
“For now, the market [likes what] they see…but the currency remains vulnerable to any last-minute glitches and, more important, to long-term skepticism from investors,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.
The dollar edged higher against the yen, euro and other rivals after Federal Reserve Chairwoman Janet Yellen said economic conditions were improving fast enough to warrant an interest-rate hike sometime this year.
“I expect that it will be appropriate at some point later this year to take the first step to raise the federal-funds rate and thus begin normalizing monetary policy,” Yellen said during a speech at the City Club of Cleveland.
The dollar USDJPY, +1.17% traded at 122.85, up from ¥121.71 late Thursday in New York, but down 0.16% on the week. The pound GBPUSD, +0.8778% traded at $ 1.5510, up from $ 1.5375 on Thursday. But it finished the week 0.63% lower against the dollar.
Follow the latest on the Greek debt crisis here
The ICE U.S. dollar index DXY, -0.42% a measure of the dollar’s strength against a basket of six currencies, was down 0.6% on the day to 96.0430, and finished week less than 0.1% lower.