Euro shrugs off new Greek deal as stock indices rally

Euro weakened after the knee-jerk reaction upwards to the new bailout deal struck between Greece and its creditors while equities have cheered the latest move.

German Chancellor Angela Merkel said the Eurogroup is ready to consider extending the maturity on Greek loans, adding that a "nominal haircut" is out of the question.

Greek Prime Minister Alexis Tsipras has defended the deal, saying this agreement will allow them to stand on their feet again.

Tsipras said that he managed to persuade leaders not to place the new €50bn recapitalision fund in Luxembourg - it will remain in Athens.

At 9.10am GMT, EUR/USD traded at 1.1057, nearly 1% down from the previous close. The immediate reaction was to 1.1190 from near 1.1090.

France's CAC 40 was trading 1.64% higher while Germany's DAX index was up 1.3%. The UK's FTSE 100 traded 0.75% higher around then.

Analysts say that the new deal means that demand for euro-denominated assets will be lower hence the negative impact on the single currency.

EUR/GBP dropped to 0.7123, down 0.95% on the day, and distancing further off the 3-week high of 0.7226 touched on 8 July.

EUR/JPY slipped to 136.65 from the previous close of 136.91, and moving sharply off the day's high of 137.82, which was a two-week high.