Financial Times
June 6, 2011
The euro hit one-month highs against the dollar and the pound on Monday as hopes for a new bail-out package for Greece boosted the single currency.
The single currency benefited after the troika of the European Union, International Monetary Fund and the European Central Bank finished its progress report on Greece and said that an outline agreement for further aid had been reached.
Estimates suggested a new aid package for Greece was likely to be about €100bn in order to meet the country’s financing needs in 2013 and 2014.
Sentiment towards the single currency was also lifted by news that the incumbent socialist government in Portugal had been ousted, with prospective new prime minister Pedro Passos Coelho promising to go further to implement austerity reforms to secure bail-out funds.
Analysts said that with fears over eurozone peripheral debt easing, the euro was supported by the prospect that the ECB would express “strong vigilance” on inflation at its policy meeting on Thursday, a signal that interest rates would increase next month.
The euro rose to a high of $1.4658 against the dollar, its strongest since May 5, and a one-month peak of £0.8931 against the pound.
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