Euro gains on reports a Greek deal reached

A cashier counts euro banknotes in Vilnius, Lithuania.
Ints Kalnins | Reuters

The euro gained against the U.S. dollar on Friday after euro zone ministers agreed to extend Greece's financial rescue package by four months.

The agreement removed the immediate threat that Greece could run out of money next month and be forced out of the single currency area. The new leftist-led Athens government now can try to negotiate longer-term debt relief with official creditors.

The euro rallied to a session high of $1.1428 and last traded at $1.1402. Before the meeting of finance ministers began, the single currency had fallen to $1.1287.

European Union paymaster Germany, Greece's biggest creditor, had demanded ``significant improvements'' in reform commitments by Athens before it would accept an extension of euro zone funding.

Some investors have worried that a large renegotiation of Greece's bailout could affect other countries that need bailouts.

Traders next week will watch Federal Reserve Chair Janet Yellen's testimony before the U.S. Senate Banking Committee on Tuesday for any hints about when the U.S. central bank may begin raising rates.

Minutes from the Fed's January meeting, which were released on Wednesday, were seen as more dovish than expected as some officials expressed concerns about raising interest rates too quickly.

Fed officials also debated the impact that stubbornly low inflation measures were having on the central bank's confidence in moving ahead with raising rates.

—By Reuters

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