LONDON - AFP
The European single currency rose on Wednesday in response to Portugal\'s 78-billion-euro bailout deal, and ahead this week\'s key US economic data and interest rate decisions in Britain and the eurozone. The euro climbed to $1.4862 from $1.4823 late in New York on Tuesday, after jumping briefly above $1.49 on Monday for the first time in 16 months. On Tuesday, debt-ravaged Portugal became the third eurozone country to agree a bailout with the European Union and the International Monetary Fund. \"News that Portugal has come to an agreement about its bailout package with the EU and IMF has, helped underpin the single currency, with a package of 78 billion euros over three years,\" said CMC Markets analyst Michael Hewson. But the reforms required in return are still under wraps and the package is tied to approval by the opposition which has already precipitated an early election by rejecting cutbacks to fight the debt mountain. Portugal had fought hard against a rescue, arguing that it was a different case from Greece and Ireland, which were both rescued last year by EU/IMF bailout loans. \"Portugal finally agreed the terms of its bail-out, easing its debt concerns, at least for the next few years,\" said CurrenciesDirect analyst Alistair Cotton. He added: \"Caretaker Prime Minister Jose Socrates said he achieved a good deal let\'s see if he is still saying that in six months time, if he manages to cling to power.\" Later on Wednesday, traders would absorb US private payrolls figures, while the eagerly-awaited non-farm payrolls data is due on Friday. And further afield, on Thursday, the European Central Bank is widely expected to keep its key interest rate at 1.25 %, analysts say. However, the ECB governing council, gathering in Helsinki for one of two annual meetings away from the bank\'s headquarters in Frankfurt, could hint at more rate hikes, with the first possibly as soon as June. The Bank of England, meanwhile, is forecast on Thursday to keep it key lending rate at a record-low level of 0.50 % as Britain\'s weak economic recovery offsets high inflation. Japanese financial markets remained closed amid a three-day public holiday, with trade due to resume on Friday. In London on Wednesday, the euro changed hands at $1.4862 against $1.4823 late in New York on Tuesday, at 120.39 yen (120.01), £0.9007 (0.8991) and 1.2794 Swiss francs (1.2770). The dollar stood at 81.01 yen (80.98) and 0.8608 Swiss francs (0.8615). The pound was at $1.6499 (1.6482). On the London Bullion Market, gold prices eased to $1,537.89 an ounce from $1,540.25 late Tuesday.