Euro wins more support from Greek debt deal

LONDON: The euro strengthened against the dollar on Monday as the single currency won further support from last week's deal by European leaders to rescue Greece from its debt crisis, dealers said.

The euro rose to 1.3485 dollars, up from 1.3411 dollars in New York late on Friday.

Against the Japanese currency, the dollar stood at 92.52 yen, up from 92.47 late on Friday.

"The euro has continued to gain ground ... after last week's accord by European leaders, with respect to emergency help for Greece if they need it," said CMC Markets analyst Michael Hewson.

"Having achieved this hard-won emergency help, Greece now has to prove they have the determination to keep the nation's finances on an even keel.

"Between now and the end of May they need to raise around 20 billion euros (27 billion dollars) and with Greek bond yields at current levels this could prove quite an expensive process unless these yields start to slide back."

Greece launched a seven-year bond issue on Monday to raise billions of euros, the government debt office said, four days after the European Union agreed on a financial safety net for the debt-laden country.

No figures were available for the operation, but a market source said the amount would depend on investor demand.

The Greek debt problem has caused a deep crisis in the European Union and eurozone, and has caused the euro to fall.

The yield on Greek 10-year bonds rose again on Monday to 6.208 percent compared to 6.193 percent late Friday. The rate had gone up to almost seven percent earlier this year as investors worried over a default.

The EU agreed last Thursday on an unprecedented contingency plan which would involve the International Monetary Fund which has sparked fears of contagion to other weak EU members.

Under the plan, Greece can request combined EU-IMF help as a last resort if it fails to find reasonable interest rates on the bond market to finance its ballooning deficit and debt.

The agreement ended a policy spat between France and Germany that had weighed heavily on the eurozone unit.

"Last week's agreement on an aid package to Greece helped return a semblance of confidence to markets and the euro," added Credit Agricole CIB analyst Simon Smollett.

In London on Monday, the euro was at 1.3485 dollars against 1.3411 dollars on Friday, at 124.77 yen (124.03), 0.8998 pounds (0.9003) and 1.4309 Swiss francs (1.4281).

The dollar stood at 92.52 yen (92.47) and 1.0612 Swiss francs (1.0648).

The pound was at 1.4985 dollars (1.4900).