Euro rallies in New York

The euro rallied to a two-week high against the dollar on Thursday after eurozone officials agreed on measures to solve Greece's debt troubles, easing fears the country's debt crisis would spread.
The leaders said in a statement following a summit that the total official financing for the second Greek assistance package will be around 109 billion euros. The private sector would provide a net 37 billion euros to the package.
The European Financial Stability Facility, the eurozone bailout fund, will provide longer-dated loans to Greece at lower interest rates. The EFSF would also be able to intervene on primary and secondary debt markets when the European Central Bank deemed it necessary.
"The fact that the EU has thrown everything including the kitchen sink into this is very comforting for investors and unless the rating agencies say this is not enough for Greece to avoid a default, the euro should hold onto its gains," said Kathy Lien, director of currency research at GFT in New York.
The euro climbed as high as $1.44177 on trading platform EBS, the highest level since July 6, before easing slightly to $1.4398, up 1.3 percent on the day. It also rose about 0.7 percent to 1.1730 Swiss francs.
Slow progress on resolving Greece's debt crisis has been a major headwind for the euro. Investors fear Europe's debt crisis, which has also engulfed Portugal and Ireland, could spread to the much bigger economies of Spain and Italy.
Peripheral debt rallied as yields tumbled on short-dated Greek debt, down more than 4.5 percent in the two-year segment. The more liquid Italian and Spanish debt markets also showed substantial relief.
Some key questions remained, analysts said, such as the size of the EFSF fund and how weaker economies can reduce their debt burdens to sustainable levels over the long term.
In the United States, two major newspapers reported the White House and top Republican lawmakers are close to striking a debt-reduction deal. This would remove the major political hurdle to raise the statutory $14.3 trillion debt ceiling so the United States can avoid a default in early August and the loss of its top-notch credit rating.
Ratings agency Standard & Poor's said on Thursday there was a 50-50 chance it would lower the long-term US credit rating within the next three months.
The dollar hit a four-month low against the yen of 78.30, according to Reuters data, the lowest since joint G7 intervention in mid-March to stem a rise in the Japanese currency. The dollar was last down 0.6 percent at 78.35 yen.