Euro jumps on EU bailout for debt-hit Greece

Sixteen-nation eurozone has agreed to provide debt-hit Greece with a financial aid of 30 billion euros (£26 billion), in a move that helped the euro to report the biggest daily gain in two months on Monday.  

The announcement of the aid also helped Asian stocks to hit the 22-month highs. 

Demand for riskiest assets jumped, which in turn boosted the euro by 1.3 per cent to $1.3665 on Monday. The stronger euro looked set to test its March 17 high, $1.3817, after breaking its 55-day moving average at around $1.3637. 

Greece will get three-year loans from fellow members of the currency bloc this year at interest rates of around 5 per cent. Currently, Greece is paying 7 per cent interest on the open market. 

Commenting on the development, Greek Prime Minister George Papandreou said, "With today's decision, Europe sends a clear message: that nobody can play with our common currency, nobody can play with our common fate.” 

Greece has been suffering huge budget deficit, which reached approximately 13 per cent of country’s GDP last year. Greece’ total debt is estimated at around 300 billion euros.