Euro Climbs to Seven-Week High on Sovereign Debt Deal; Yen Rises to Record

The euro rallied to a seven-week high against the dollar after European leaders agreed to an expansion of a rescue fund for indebted nations and reached an accord with lenders on writedowns for Greek debt.

The yen rose to a record versus the dollar for the fourth time in five days day on speculation Bank of Japan measures announced today will fail to contain the currency’s rally. The South African rand and Australian dollar were the best performers against the U.S. currency after the economy expanded at the fastest pace in a year, sapping demand for a refuge.

“European leaders bought themselves several months of time at least,” said Brian Dolan, chief strategist in Bedminster, New Jersey, at FOREX.com, a unit of the online currency trading firm Gain Capital. “Even before the summit, we had a push in the euro, down in the dollar, up in all the risk currencies, higher in stocks. The bond market continued to take a pretty jaded view of all the goings on, and that has continued.”

The euro appreciated as much as 2.3 percent to $1.4220, the highest level since Sept. 6, before trading at $1.4209 at 12:26 p.m. New York time. It’s the biggest rally on an intraday basis since Oct. 10. The euro advanced 1.6 percent to 107.66 yen. The yen increased 0.5 percent to 75.77 versus the dollar after touching the post-World War II high of 75.66.