The euro rallied against the dollar and the yen on Monday as investors bet European authorities can keep the euro zone intact, though concerns over Spain's ailing banking sector and global growth continued to cap gains. France and the European Commission signalled their support on Monday for an ambitious plan to use the euro zone's permanent bailout fund to rescue stricken banks, as European officials try to reassure investors they can contain an escalating crisis.
Separately, finance ministers and central bank governors of the Group of Seven leading economies will hold a conference call on Tuesday morning to discuss the European debt crisis, but there will be no Group of 20 ministerial call, a spokeswoman for Canadian Finance Minister Jim Flaherty said on Monday.
The euro was trading 0.5 percent higher at $1.2494, up from the trough touched on Friday, which marked its lowest since July 2010. The Monday peak of $1.2509 was a four-day high. With London markets closed for a bank holiday, trade volume had been thin until New York markets opened. Against the yen, the euro traded up 0.8 percent at 97.75 yen, well above Friday's 11-1/2-year low of 95.57 yen, using Reuters data. The dollar rose 0.3 percent to 78.25 yen, off Friday's trough of 77.65, its lowest since mid-February.
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