EUR NEWS: The euro rises against the dollar, buoyed by the announcement of an aid to Spain

EUR NEWS: The EUR gained ground against the USD Monday, in a market driven by the announcement of the aid of 100 billion EUR granted by the 17 members of the EUR zone to Spain, to bail out its failing banking system.

Around 0900 GMT, the EUR bought 1.2602 dollars, against 1.2514 dollars on Friday at 2100 GMT. The single European currency has even reached the start of Asian trading 1.2671 dollars, its highest level for two and a half weeks.
The EUR also rose against the yen at 100.26 yen against 99.49 yen on Friday, climbing even in early Asian trade at 100.95 yen; it’s highest since May 23

The 17 ministers of the EUR area reached Saturday during a telephone meeting an agreement that aims to clean up Spanish banks asphyxiated by their exposure to real estate.
 
The EU loan will reach one hundred billion EUR and will be injected into the Spanish public assistance funds to the banking sector (Frob), which then allocate this money to banks that request it.
Political leaders did their best to deny almost to the end that the country needed aid, Spain's fourth largest economy in the EUR area, has finally accepted the plan making it the fourth country, after Greece, Ireland and Portugal, to receive external assistance.

Analysts at Commerzbank, "the amount is obviously futile to impress the markets and for the moment, it's effective."

However, "if for many it is an agreement on a positive (aid) has been found more quickly than previously thought (the market), which raises some uncertainty (about the future of the EUR area) It remains to be seen if the amount announced will be enough, "warned Huber, an analyst at ETX Capital.

Moreover, the rebound of the EUR supplied by this bailout is likely to be short lived as "Greek elections are now in less than a week and should again focus attention soon," added Mr. Huber.

Indeed, the radical left has always on the rise and the plan calls for the cancellation of creditors for the recovery of the economy based on a strict austerity, while wishing to maintain the country in the EUR, what revive Traders' concerns before the new vote on Sunday.

Around 0900 GMT, the British pound fell against the EUR at 80.93 pence per EUR, after falling to its lowest level since May 1 (81.68 pence) in early Asian trade. The pound rose against the greenback at 1.5570 USD.

The Swiss franc (CHF) was stable against the EUR at 1.2012 Swiss francs to the EUR and rose against the greenback at 0.9532 Swiss francs to the USD, after reaching 0.9479 franc in early trading Asia, its highest for two and a half weeks.

The ounce of gold was worth 1,594.40 against $ 1,576.50 USD Friday night.