U.S. Dollar Expected Higher after Greece Subsides

The dollar is biding its time and should resume its climb once the euphoria over a possible Greek debt deal dies down and focus returns to higher U.S. interest rates, strategists say.

The euro has been doing better against the dollar but it basically moved sideways since late last week, even with the optimism over a possible deal with Greek creditors that has driven European equity markets sharply higher. The euro was trading slightly higher Monday at about $1.13.

“Our sense is FX markets are just waiting for Greece to be resolved so they can go back to watching the fundamentals they prefer to watch—what happens with the Fed outlook … rather than trying to second guess Greek political headlines, which is difficult for FX,” said Vassili Serebriakov, strategist at BNP Paribas.