Euro modestly higher on Greek package, Aussie falls

SYDNEY (BestGrowthStock) – The euro inched higher on Monday as investors absorbed a 110 billion rescue euro bailout package for debt-laden Greece, while growth-linked currencies like the Australian dollar fell after China tightened policy.

The euro was hovering at $1.3320 in Asian trade, having advanced to as far as $1.3359, from around $1.3313 late on Friday. Near term resistance is seen around $1.3415, the daily high struck on April 27.

The euro was also higher on the yen at 125.18 yen, from 125.06 yen late on Friday. Trade is expected to be light due to holidays in Japan, China and the UK.

Still, the euro is down about 7 percent against the greenback since the start of the year as fears about a default by Greece and concerns it will spread to other southern European countries drove speculators to go short on the single currency.

On Sunday, European finance ministers agreed to a record 110 billion ($147 billion) bailout package for Greece. They approved a three-year package of emergency loans and agreed the first funds would be released in time for Athens to make a big debt repayment to creditors on May 19.

The plan would seem to lessen the immediate danger of a default but still needs to be approved by German politicians and the tough conditions will be hard for many Greeks to swallow. The loans to Greece are linked to progress in austerity measures promised by Athens, a condition that traders are wary of.

The Australian dollar was down at $0.9245, from around $0.9256 late on Friday, as sentiment toward commodity-linked currencies was hurt by China’s decision to raise banks’ reserve requirements by 50 basis points at the weekend.

The Canadian dollar also slipped to C$1.0160, from around C$1.0156 late in New York on Friday when it lost nearly 1 percent.

The dollar index (Read more about the global trade. ) (.DXY: ) was down 0.04 percent at 81.829. It gained marginally on the yen, rising to 94.07 yen from around 93.94 yen late on Friday. It is a big week ahead in the United States, with April’s job data on Friday the main focus.

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(Editing by Wayne Cole)

Euro modestly higher on Greek package, Aussie falls