Investing.com -- EUR/USD rose mildly on Thursday paring earlier gains in the morning session when it surged to one-month highs, amid mixed developments in the Greek Debt negotiations.
Earlier, the euro surged to a session-high of 1.1436 against the dollar, moving above 1.14 for the first time since May 18. But the currency pair retreated on Thursday afternoon, as a tense meeting of euro zone finance ministers in Luxembourg ended without a deal between Greece and its international creditors. An accord between the cash-strapped nation and the European Central Bank, European Commission and International Monetary Fund could unlock critical aid deemed necessary to stave off bankruptcy.
Upon the conclusion of Thursday's meeting, Reuters reported that European Central Bank Executive Board member Benoit Coeure told Netherlands finance minister Jeroen Dijsselbloem that he is unsure if banks in Greece will remain open by Monday if a deal is not reached. Earlier this week, more than €2 billion in deposits had been taken out of banks throughout Greece, underscoring the increased potential of a Greek default on its sovereign debt.
Before the start of the meeting, German newspaper Die Zeit reported that the euro zone had proposed an interim deal to Greece, which would provide it with €10 billion in cash – enough of a sum to recapitalize its banks.
Euro zone officials neither confirmed, nor denied the reports following Thursday's meeting. The ECB is also reportedly set to decide by Friday whether it will provide added liquidity to the Greek banks to help stem the outflow of deposits. Greece prime minister Alexis Tsipras, Germany chancellor Angela Merkel and France president Francois Hollande agreed to hold an emergency EU meeting on Monday in a last-ditch attempt for Greece to avoid bankruptcy.
International Monetary Fund head Christine Lagarde warned that Greece will not be given a grace period if it fails to make a loan repayment of €1.5 billion on June 30.
"It will be in default, it will be in arrears vis-a-vis the IMF on July 1, but I hope it is not the case, I really do," Lagarde said. "There is no grace period or two-month delay, as I have seen here and there."
Greece finance minister Yanis Varoufakis, meanwhile, reminded his creditors of comments made by European Central Bank president Mario Draghi on the importance of a cohesive, unified European Union, which could be threatened if the nation leaves the euro zone.
"Some time ago Mario Draghi said quite correctly that for the euro to succeed anywhere it has to succeed everywhere," Varoufakis told reporters before the meeting. "We think he is absolutely spot on and today we are going to be presenting the Greek government's ideas along those line. The purpose is to replace costly discord with effusive consensus."
Varoufakis later wrote on a blog post that a proposal Greece outlined to its creditors on Thursday included: a reduction in non-wage costs, a method for unifying public sector payrolls and a short-term program for limiting foreclosures. Before leaving the meeting, Dijsselbloem told reporters that the proposals were not sufficient.
Elsewhere, the U.S. Dollar Index plunged to a monthly-low of 93.71, before rallying slightly to 94.25. The dollar continued its sharp decline one day after Federal Reserve chair Janet Yellen refused to offer any explicit wording on the timing of its first interest rate hike in nearly a decade, increasing the possibility that the Fed could wait until December for lift-off.