By James RamageThe euro rose against the dollar and the yen in light trading Monday as investors took a positive view of Greece's efforts to repay its loans and restore financial stability.
The common currency gained against the dollar to $1.0844, halting a three-day decline. The euro climbed 0.3% against the yen to Y134.77, its first increase in four sessions.
Investors moved into the euro after Greek officials said Monday that the country made payments to the European Central Bank and the International Monetary Fund. Greece also opened its banks for the first time in three weeks.
"It appears the euro rallied a bit on optimism around Greece making payments to creditors," said Brad Bechtel, managing director at Jefferies FX Group.
Many investors had feared that Greece's worsening finances, massive debts and confrontational negotiating tactics with creditors would drive the embattled country out of the euro area. The mood on the debt crisis shifted last week after eurozone officials and Greece agreed on a new bailout.
Despite Monday's gains, the euro's outlook remains grim. Little growth and inflation, low--and even negative--interest rates, and a massive bond-purchasing program all combine to discourage investors from holding the currency.
In addition, Greece remains a risk to the euro, said Steven Englander, head of developed-market currencies strategy at Citigroup Inc.
"A lot of investors are looking at this and saying it doesn't add up, that Greece will not likely withstand the austerity that's demanded of them," Mr. Englander said. "In a year Greece could be pulling out [of the euro] and trying out on their own. So, there's not huge enthusiasm here."
In other trade, the dollar increased 0.2% against the yen, to Y124.28, heading for its highest close since June 9.
Write to James Ramage at james.ramage@wsj.com
(END) Dow Jones Newswires
July 20, 2015 14:23 ET (18:23 GMT)
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