Euro Strengthens as Stocks, Commodities Gain on Greek Aid Plan

April 12 (Bloomberg) -- The euro gained for a third day against the dollar, stocks climbed and commodities jumped after European governments unveiled a plan to halt Greece’s fiscal crisis.

Europe’s currency strengthened 1 percent against the dollar to $1.3634 at 11:05 a.m. in Tokyo and rose against all 16 of its most-traded counterparts. The MSCI World Index added 0.5 percent, and Standard & Poor’s 500 Index futures advanced 0.4 percent. Oil increased 0.7 percent and copper gained 1.2 percent.

Euro-region finance ministers pledged as much as 45 billion euros ($61 billion) in loans at below-market interest rates to help rescue debt-plagued Greece and restore confidence in the European currency, which weakened 4.8 percent against the dollar this year. The bailout, combined with expectations of faster economic growth in India and South Korea, improved investor sentiment in Asia, where the MSCI Asia Pacific Index jumped 0.8 percent to 129.06, the highest since August 2008.

“The development in Greece is giving market sentiments a boost because it eases concerns of a default among European nations facing debt problems,” said Olan Caperina, a fund manager at Bank of the Philippine Islands, which manages $9.7 billion. “The economic data coming out, like the recent retail trend in the U.S., are also positive. Investors have reasons to turn positive and put in money into the markets.”

Rescue Plan

Europe’s currency rose 1 percent to 127.07 yen after European nations and the International Monetary Fund pledged to provide three-year loans with a rate of about 5 percent, compared with 6.98 percent on Greek three-year securities. The agreement, aimed at stopping Greece’s financial distress from infecting the rest of the region, damped concerns about the viability of the euro, which was created in 1999.

The pact also may remove an impediment to the global economic recovery now being led by Asian nations. South Korea’s won rose 0.5 percent to 1,112.35 per dollar, reaching the strongest level in more than 18 months, as the central bank raised its economic growth forecast and a rescue package for Greece boosted demand for higher-yielding assets.

Copper in London cracked the $8,000-a-ton level and rallied to the highest level since Aug. 1 2008 as the dollar declined and after China’s imports surged in March on rising seasonal demand. The metal for delivery in three months gained as much as $8,043.75 a metric ton. Aluminum advanced 0.8 percent to $2,425 a ton. Gold for immediate delivery rose as much as 0.7 percent to a four-month high of $1,170 an ounce.

Oil rose for the first time in four days as the dollar fell after European governments offered debt-burdened Greece a rescue package and China increased crude imports to meet surging demand.

Oil Rises

Oil advanced 0.7 percent to $85.54 as the weaker dollar bolstered the appeal of commodities as an alternative investment.

“China is playing a key role in underpinning global demand for commodities, including crude,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “The Greek rescue plan, which is going to be driving the markets today, resolves a lot of the uncertainty. A weaker dollar is a supportive element for oil prices.”

Advancing stocks beat decliners by more than three to one on the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average increased 1.1 percent, the biggest increase among major equity benchmarks in Asia.

BHP Billiton Ltd., the world’s largest mining company, gained 1.3 percent to A$44.46 in Sydney , and Mitsubishi Corp., Japan’s　largest commodities trader, climbed 2 percent to 2,491 yen. Nintendo Co., a game maker that gets 34 percent of its revenue in Europe, increased 3.6 percent to 31,450 yen in Osaka. Toyota Motor Corp., the Japanese carmaker that gets 31 percent of its revenue in North America, rose 1.4 percent to 3,755 yen after U.S. wholesale inventories climbed more than estimated.

Futures on the Standard & Poor’s 500 Index climbed following the index’s 0.7 percent advance on April 9 to the highest close since September 2008. Inventories at U.S. wholesalers rose 0.6 percent in February, suggesting businesses are ramping up orders, a Commerce Department report showed. Economists had estimated a 0.4 percent increase.