Euro rises as EU tackles Greece
LONDON: The euro rose against the dollar on Thursday as EU leaders held a key summit aimed at tackling Greece's debt crisis.
The euro climbed to 1.3759 dollars from 1.3732 dollars late in New York on Wednesday.
The dollar fell to 89.85 yen from 89.92 yen late Wednesday.
Analysts said the euro gained support from expectations the informal EU summit in Brussels would come up with plans to help Greece tackle its deficit crisis, which risks spilling over into other eurozone countries.
"It has been reported this week that Germany is considering support for the country and there is a growing expectation that further details could emerge after (Thursday's) informal meeting of European heads of state or government," said John Higgins, an analyst with research house Capital Economics.
He noted, however, that "tough conditions are likely to be attached to any support package, making it a bitter pill to swallow for the economy."
While the cost of any EU-led bailout is likely to be borne largely by the eurozone economies, the euro's rebound "may reflect a feeling that the region is showing signs of being able to deal with its own problems", Higgins added.
Spanish prime minister Jose Luis Rodriguez Zapatero said in Brussels ahead of the summit that help for Greece is on the agenda.
"We have to support Greece, that's clear, and it's Europe and the Eurogroup that will do it," said Zapatero, whose country currently holds the EU's rotating presidency.
But Dariusz Kowalczyck, chief investment strategist at SJS Markets Ltd in Hong Kong, said financial investors remained concerned about the nature of the financial help for Greece.
"It seems that the EU summit will not end with a specific plan to help Greece but merely with a political declaration," he wrote in a market commentary.
Greece, one of the 16 countries using the euro single currency, has been under increasing pressure from financial markets due to the size of its deficit, swollen by the global economic crisis.
The dollar was also under pressure following remarks by US Federal Reserve chief Ben Bernanke offering hints of higher interest rates as the central bank ends its massive stimulus effort.
In London on Thursday, the euro was changing hands at 1.3759 dollars against 1.3732 dollars late on Wednesday, at 123.63 yen (123.51), 0.8815 pounds (0.8810) and 1.4671 Swiss francs (1.4664).
The dollar stood at 89.85 yen (89.92) and 1.0662 Swiss francs (1.0671).
The pound was at 1.5608 dollars (1.5588).