Dollar rises as Greece deal turns focus on Fed

Tokyo - The dollar edged up against the euro and yen in Asian trade on Tuesday as investors turn their attention to a possible US Federal Reserve interest rate hike after Greece and its creditors finally agreed a bailout deal to keep it in the eurozone.

The euro dipped to $1.0995 from $1.1004 in New York late on Monday, while the greenback climbed to ¥123.51 from ¥123.45.

The single European currency gained to ¥135.89 from ¥135.84.

After gruelling 17-hour talks, Greek Prime Minister Alexis Tsipras accepted a series of tough reforms in exchange for new financing that will enable the country to pay its bills and avert a turbulent exit from the eurozone.

In the moments after the deal was announced Monday, the euro jumped to nearly $1.12 before falling back.

"Any reduction in concerns over Greece may simply clear the way for the Fed to begin raising US interest rates sooner and further than the markets currently anticipate," Capital Economics said in its client's note.

Federal Reserve chief Janet Yellen said last week that the central bank will likely begin raising interest rates before the end of 2015.

While, saying their decision would be based on US data, Fed policymakers had been concerned about announcing a hike while there was the possibility of a Greek euro exit, which could have battered the global economy.

"Expectations of a Fed rate hike have propelled dollar buying this far," Naohiro Nomoto, an associate for currency trading at Bank of Tokyo-Mitsubishi UFJ in New York, told Bloomberg News.

"Market players, expecting the Greek issue to drag on, are ignoring Greece and returning to dollar buying amid data and congressional testimony by Yellen this week."

The dollar was stronger against other Asia-Pacific currencies.

It firmed to 1 139.67 South Korean won from 1 130.95 won on Monday, to Sg$1.3608 from Sg$1.3525, to 63.54 Indian rupees from 63.46 rupees and to 45.19 Philippine pesos from 45.17 pesos.

It also rose to 34.04 Thai baht from 33.97 baht, to 13 336.50 Indonesian rupiah from 13 302.90 rupiah and to Tw$31.03 from Tw$30.97.

The Australian dollar fell to 74.30 US cents from 74.37c, while the Chinese yuan firmed to ¥19.89 from ¥19.75.