The Polish currency was under 4.15 to the euro in early trading on Monday morning, up from 4.18 on Friday. It may even appreciate to 4.1250-4.13, analysts said. Polish bonds are also seen gaining on the back of the news.
The German Dax up 1.4% and FTSE100 were both up almost 1%.
"There are indications that an agreement has been reached. The Asian markets were up on the news. We may see a short-term appetite for risk," Jan Koprowski, a forex dealer at BGŻ BNP Paribas in Warsaw told the Polish News Agency (PAP).
Greece’s third bailout in five years appeared to have been agreed between the EU and the Greek government late on Sunday evening.
Donald Tusk, the head of the European Council, announced that the 19 leaders of the eurozone had unanimously reached agreement.
Greek PM Alexis Tsipras has reportedly agreed to form a new government of national unity and Greece will have to pass laws immediately, including simplifying its VAT rates and applying VAT on a wider basis and cuts in pensions.
Only then can the European Stability Mechanism (ESM) bailout kick in. This in turn will require parliaments in Finland, Germany, Austria, Netherlands, Slovakia and Estonia to approve starting ESM talks.
The ESM is an international organisation established in 2012 as a firewall for the eurozone to provide instant access to financial assistance programmes for member states of the eurozone in financial difficulty.
The Greek parliament will then have pass laws to attain bridge financing to pay the European Central Bank on 20 July.
“Today, we had only one objective: to reach an agreement. After 17 hours of negotiations, we have finally reached it. One can say that we have ‘agreekment.’ Leaders have agreed in principle that they are ready to start negotiations on an ESM programme, which in other words means continued support for Greece,” Tusk said.
“The decision gives Greece a chance to get back on track with the support of European partners. It also avoids the social, economic and political consequences that a negative outcome would have brought. I welcome the progress and the constructive position of Greece that helps to bring back trust among eurozone partners,” Tusk continued. (jh)