By Deborah Levine and Sarah Turner, MarketWatch
NEW YORK (MarketWatch) — The euro rose Thursday after European Central Bank President Mario Draghi confirmed reports that Greece had finally agreed on a package of austerity measures to propose to its creditors in order to avoid defaulting on its debt next month.
The euro EURUSD +0.19% traded at $1.3291, up from $1.3264 late Wednesday.
The ICE dollar index DXY -0.25% , which measures the greenback against a basket of six other currencies, fell to 78.497, down from 78.589 in late North American trading on Wednesday.
Media outlets reported that Greek Prime Minister Lucas Papademos struck deal with Greek political leaders over austerity measures has been reached and a statement will be released shortly.
“I got a call from the PM of Greece that an agreement has been reached and has been endorsed by major parties,” Draghi added in a press conference after the ECB’s policy meeting, in which official left interest rates alone. See story on ECB policy.
While most provisions were agreed by the ruling and opposition leaders by late Wednesday, details over adjustment to pensions remained as a sole sticking point, according to the reports. See more on Greek negotiations.
Sterling up after QE
The British pound GBPUSD +0.26% rose to $1.5861 from $1.5824 Wednesday. That followed the Bank of England’s decision to enlarge its bond-purchase program by 50billion pounds, as analysts expected.
“Without further [quantitative easing] in the bag, the pound has rallied,” said Kathleen Brooks, research director at Forex.com. “The road to $1.60 actually depends less on QE and more on the overall risk environment. In the last 6 months the pound has had a very strong positive correlation to risky assets like the [S&P 500.]”
“So if you want to know where the pound is going, watch what risk is doing,” she said.
Another currency seen as an indication of investors’ risk appetite is the Australian dollar AUDUSD +0.04% . The aussie rose to $1.0807, compared to $1.0798 Wednesday.
Against the Japanese yen, the dollar USDJPY +0.35% rose to ÂĄ77.35, from ÂĄ77.03 in late North American trading.
Deborah Levine is a MarketWatch reporter, based in New York.
Sarah Turner is MarketWatch's bureau chief in Sydney.
