Euro rallies following rescue package announcement

The euro rallied on the foreign exchange markets today (Monday May 10th) after a €750 billion (£655 billion) bailout package was agreed over the weekend.

In an effort to prevent the debt crisis in Greece from spreading to other countries, European Union finance ministers reached a deal with the International Monetary Fund (IMF).

Under the terms of the agreement, around €440 billion of loan guarantees will be offered to eurozone countries over three years.

A further €60 billion will be made available from the European Commission and the IMF will provide €250 billion.

Olli Rehn, the EU's monetary affairs commissioner, said the agreement proves that "we shall defend the euro whatever it takes".

The single currency jumped around 1.8 per cent against the dollar in early morning trading in the Far East, reaching $1.29.

Commenting on the currency movements, Valentin Marinov, currency strategist at Societe Generale, told Reuters: "The package announced yesterday was supportive of euro sentiment."

Posted by Chris Barber

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