The Euro gapped higher against the Dollar after European nations unveiled their plan to bailout debt-ridden Greece. The surge in the EUR USD helped initially to drive up demand for higher yielding currencies while putting pressure on the Japanese Yen.
The Greek rescue package of loans was pegged at as much as 40 billion Euros. The details of the plan reveal that this amount is expected to be treated as a line of credit that Greece can tap as it deems necessary. This plan includes the support of the International Monetary Fund which makes it similar to the plan revealed last month.
After taking austere measures to shore up its finances, Greece has been suffering through severe financial problems as the country tries to adjust to a different way of conducting business. Recently it tried to tap the capital markets for financing, but that proved to be a near-disaster as interest rates soared, driving down bond prices while pushing up the cost of servicing the debt.