European stocks rise on Greek deal; euro falters

European equities surged higher today on news of a long-awaited Greek bailout agreement, but the euro ran out of steam as traders saw calm on the continent boosting chances of a US interest rate hike.
The CAC 40 in Paris jumped 1.94 per cent higher to 4,998.10 points and Frankfurt's DAX 30 climbed 1.49 per cent to 11,484.38 points.
Milan rose 1.00 per cent and Madrid gained 1.70 per cent.
Outside the eurozone, London's FTSE 100 index won 0.97 percent to 6,737.95 points.
Greece reached a desperately-needed bailout deal with the eurozone today after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency.

In reaction, the euro briefly rose to a July peak of USD 1.1216. However, it then fell back to USD 1.1028, down sharply from USD 1.1149 late in New York on Friday.

"The relief rally in the euro was short-lived as investors await details of the Greek agreement," said Nick Stamenkovic, macro strategist at RIA Capital Markets.
The euro also failed to benefit because the Greek deal made it more likely the US Federal Reserve would raise interest rates soon, dealers said.
"Whilst equity investors have been buoyed by the general concept of agreement, currency investors are more cautious, as a deal on Greece now removes one of the key obstacles which might have prevented the Fed from actively considering imminent US interest rate rises," said analyst Rebecca O'Keefe at broker Interactive Investor.

"The removal of this barrier -- combined with signs that the Chinese equity market is also stabilising -- could allow the Federal Reserve to raise rates more quickly and this is putting pressure on the euro," she told AFP.
Julian Jessop, chief global economist at Capital Economics, agreed.
"Even if 'Grexit' were off the table completely, the prospect of a sharp divergence in monetary policy between the US and the eurozone points to renewed euro weakness," said Jessop.
"Indeed, any reduction in concerns over Greece - and China - may simply clear the way for the Fed to begin raising US rates sooner and further than the markets currently anticipate.