US dollar rises as Greece prepares bailout proposal

[NEW YORK] The dollar rose against other major currencies except the yen on Tuesday, where it was unchanged, as debt-riddled Greece prepared bailout proposals to creditors ahead of a European Union summit.

Investors sought safe haven in the dollar and the yen amid mounting uncertainties about Greece's bid to avert an EU debt default that could send it crashing out of the eurozone.

The euro, meanwhile, pared losses to trade at US$1.1007 around 2100 GMT, down from US$1.1057 at the same time Monday. The 19-nation currency earlier had fallen to a five-week low of US$1.0916.

Two days after a Greek referendum overwhelmingly rejected reforms-for-cash bailout proposals from creditors, an emergency meeting of eurozone finance ministers and a summit of EU leaders ended on Tuesday without a concrete plan for Greece.

EU president Donald Tusk said that Greece had until Thursday to submit a reform plan for a third bailout package, and that EU leaders would hold a summit on the crisis on Sunday.

Mr Tusk warned: "Inability to find an agreement may lead to bankruptcy of Greece and insolvency of its banking system."

Greece is facing a July 20 deadline for a debt repayment of 3.5 billion euros to the European Central Bank.

"The outlook for the euro doesn't look good. But major falls for the euro could be stemmed by the ECB's can-do attitude when it comes to tackling major risks that threaten the bloc," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

AFP

Read more on the Greek crisis here