Euro climbs on optimism for Greek deal

[NEW YORK] The euro surged against the dollar on Friday amid hope that European leaders would accept Greece's proposals for a new bailout deal over the weekend.

The proposal, in which Athens offered signficant reforms over the next three years in exchange for fresh money and restructured debts from the country's official EU creditors, raised optimism that another default by Greece and its exit from the euro area could be avoided.

The euro rose more than one cent to US$1.1149 around 2100 GMT on Friday. It also surged nearly three yen to 136.86 yen.

"The current proposals set forth by Greece and the creditors should have enough common ground that an agreement can be reached before the negotiation deadline on Sunday," said Christopher Vecchio, an analyst at DailyFX.

The greenback showed little effect from Federal Reserve Chair Janet Yellen's reiteration that the Fed's first rate hike since 2006 will likely come before the end of the year.

Ms Yellen though remained cautious - reflecting sentiment from the last Fed policy meeting - noting continuing signs of slack in the jobs market and the risk of moving too soon on rates.

"We will be watching carefully to see if there is continued improvement in labor market conditions, and we will need to be reasonably confident that inflation will move back to two percent in the next few years," she said.

AFP