By KAREN JOHNSON And BRADLEY DAVIS
Wall Street Journal
An unprecedented €110 billion ($146.45 billion) aid package for debt-laden Greece should give the euro a boost this week, but any relief rally is likely to be short-lived amid concerns that other fiscally strapped euro-zone members will also need support.
The positive news from the euro zone could also be overshadowed by measures announced by China to tighten bank-lending standards to prevent its economy from overheating. That could weigh on growth-sensitive currencies, such as the Australian and Canadian dollars, which have benefited from the strength of the Chinese economy. Investors could also be rattled by the discovery of a car bomb in Manhattan's Times Square on Saturday and head for the safety of the greenback and U.S. government debt.
Still, when New York traders arrive at their desks Monday—many markets, including the U.K., are closed Monday—their focus is likely to be on the aid agreement announced Sunday by the euro zone, the International Monetary Fund and Greece. The plan requires the euro zone to put up €80 billion and the IMF €30 billion. National parliaments are expected to sign off on the deal swiftly and euro-zone leaders will validate it Friday, allowing Greece to access the funds before a mid-May debt payment of €8.5 billion is due. In return for the aid, Greece must implement tough measures to cut its budget deficit.
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