The return of some investor confidence saw the dollar down off 10-month highs reached earlier in the week. Even 10-year US Treasury yields dropped for the first time in four days, which was actually received as a bullish signal, as it represented an easing of investors' worries about dislocation in the fixed income markets.
Meanwhile, global bourses were not so sanguine. The FTSE All-World equity index was up 0.2 per cent on the day in spite of sharp rises in Hong Kong and Japan, with European shares falling off, and US shares flat after slightly disappointing GDP figures.
Optimists had hoped that an agreement on aid to Greece would create a template for containing future outbreaks of sovereign debt contagion, but it does not seem to have completely soothed anxious investors.
"The markets are looking at the next aspect: what are the costs of fiscal responsibility?" said John Stoltzfus, senior market strategist at Ticonderoga Securities. "Whether it's dealing with debt coming up in April for Greece, or what are they going to do about civil servants facing curtailment of entitlement programs, this realisation put a chill on Europe, which later spread to US markets."
Taking Greece off the radar also does not mean it is smooth sailing ahead. A brand new concern - military tensions - knocked sentiment after a South Korean ship sank and fingers were pointed at North Korea, though at the moment the cause is still unknown.
Indeed, investors may have been looking for any excuse to take profits after a strong week. The fact that indices are nearing post-crisis highs may provoke uncertainty, as a 5 per cent rise in Vix index, Wall Street's fear gauge, over the week signals about where the market is head to from here.
"There's going to be a big test to the recovery over the next two quarters," said Zach Pandl, economist at Nomura Securities in New York. "Implicit in economic forecasts is that private markets will be able to take the baton and gain momentum. But it's not clear yet that assumption is correct. How sustainable growth is, that's open to question."
The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.
The euro bounced vigorously off 10-month lows versus the dollar on the news from Brussels. It rose 1 per cent to $1.3408 and added 0.8 per cent against the yen to Y124.05.
Technical strategists at Barclays Capital suggested the euro's pop higher "warns of a near-term [further] upside correction. A break of 1.3410, trendline resistance would confirm, opening a push to $1.3445, old range lows, and potentially beyond."
However, they warned that the downtrend for the euro remained intact: "We look for a resumption lower for a re-test of retracement support at 1.3270 and potentially below".
The dollar gave ground as haven flows waned. On a trade weighted basis, the buck fell 0.6 per cent to 81.62.
In Europe the action was more circumspect as the session felt the hangover of Wall Street's inability to hold on to its early Thursday gains. The FTSE Eurofirst 300 fell 0.5 per cent and the FTSE 100 in London dipped 0.4 per cent.
The Athens stock market soared 4.1 per cent on news of the eurozone agreement, with the banking sector jumping more than 7 per cent at the start of trade.
Asian stock markets were the first to react to confirmation that a deal for Greece had been secured. The FTSE Asia-Pacific index rose 1 per cent as investors hoped focus could return to the prospects for global growth.
Greek debt responded to confirmation of the eurozone's backstop. The yield on 10-year notes fell 8 basis points to 6.19 per cent - a still elevated level, however, that Athens has consistently stated is incompatible with its budget plans.
Indeed, the spread with German Bunds, or premium the market charges to buy Greek debt, remained above 300 basis points. In the five years prior to the start of the credit crunch in the summer of 2007, that spread averaged just 20 basis points.
The cost of insuring Greece against default, as measured by credit default swaps, was unchanged at 313 basis points.
The government bonds of Portugal, suggested by some as another area of sovereign debt anxiety, saw their yield fall 9 basis points to 4.28 per cent.
US Treasuries saw better demand after another poorly received auction overnight - this time $34bn of seven-year paper - had helped push yields on the benchmark 10-year notes to within shouting distance of the 4 per cent level, and their highest mark in nearly eight months.
On Friday, bargain hunting helped push the 10-year yield down 3 basis points to 3.85 per cent. Spreads with 2-year Treasuries also narrowed to their lowest point in two weeks, indicating risk appetite was improving.
In Tokyo, the Nikkei 225 jumped 1.6 per cent to settle just shy of the 11,000 mark and at its highest point in 18 months. A weaker yen again helped exporters, while news that deflation continued to stalk the land had little impact on sentiment. China joined the rally, with the Shanghai Composite and Hong Kong's Hang Seng both gaining 1.3 per cent.
Gold enjoyed the drop in the dollar, rising 1.7 per cent to $1,108 an ounce. Crude initially led the advance in the commodity complex on a general increase in risk appetite, but later faltered to lose 0.5 per cent to $80.13 per barrel after the somewhat disappointing US GDP figures were out, which foretold a drop in demand.
Copyright The Financial Times Limited 2010.