Euro advances to two-week high as greece’s bailout terms ease

The euro advanced to the highest level in two weeks against the dollar as European officials eased the terms of loans for cash-strapped nations and expanded aid for Greece, reducing contagion concern.

The dollar dropped to its lowest level against the yen since March as White House spokesman Jay Carney and House Speaker John Boehner said there is no deal on raising the U.S. debt limit. The Swiss franc fell against most of its major counterparts on reduced safety demand as leaders agreed to guarantee Greek bonds in money market operations if a bailout agreement triggers a default.

“There’s enough good news in here to justify the rally that we’ve had today,” said David Mann, regional head of research for the Americas at Standard Chartered Plc in New York. “They’ve brought it back from going down one of the worst-case- scenario paths, but we’re not fully out of the woods yet.”

The euro gained 1.5 percent to $1.4425 at 5 p.m. in New York, from $1.4215 yesterday, after touching $1.4435, the highest level since July 6. The euro climbed 0.9 percent to 112.94 yen, from 111.99. The dollar dropped 0.6 percent to 78.30 yen and touched 78.29, the lowest level since the Group of Seven intervened to weaken the currency following the March 11 earthquake and tsunami.

Source: BusinessWeek.com