* Euro down vs dlr on German remark on Greece
* Greece's borrowing costs off lows
* World stocks hit 18-month high
By Dominic Lau
LONDON, April 12 (Reuters) - The euro retreated from a near
one-month high against the dollar on Monday and Greek borrowing
costs were off their lows after cautious German comments on an
aid package for Athens, though world stocks hit 18-month highs.
Euro zone finance ministers approved a 30-billion-euro ($40
billion) emergency aid mechanism for debt-plagued Greece on
Sunday but said Athens had not requested it be activated yet.
Together with at least 10 billion euros expected from the
International Monetary Fund in the first year, it could add up
to the biggest multilateral financial rescue ever attempted.
[]
A German government spokesman, however, said a summit of
European leaders would be needed to activate the financial
rescue mechanism agreed for Athens. []
The comments "highlight exactly the uncertainties. We still
don't know what the trigger is for an aid being released. It
would appear that we haven't reached that yet," said Adam Cole,
global head of FX strategy at RBC Capital Markets.
"It doesn't completely set out the framework the market
wants to see."
The euro <EUR=> was down 0.2 percent against the dollar at
$1.3588, after hitting a high of 1.3691. The dollar <.DXY> fell
0.6 percent against a basket of major currencies.
Greece's debt problems have been weighing on the euro, which
has lost 5 percent versus the U.S. currency.
Europe's FTSEurofirst 300 <> stock index was flat.
Greece's share benchmark <>, however, surged 4.5 percent,
and the country's banks <.FTATBNK> rose 7.6 percent.
Global equities measured by the MSCI All-Country World Index
<.MIWD00000PUS> advanced 0.3 percent to a 18-month high.
U.S. stock index futures <DJc1> <SPc1> <NDc1> were flat to
up 0.2 percent, indicating a slightly firmer start for Wall
Street. After the U.S. market close, aluminium major Alcoa
<AA.N> is to kick off the first quarter earnings season.
Asian shares outside Japan <.MIAPJ0000PUS> hit 22-month
highs and Tokyo's Nikkei average <> rose 0.4 percent.
GREEK PREMIUM FALLS
The premium investors demand to hold Greek government bonds
rather than benchmark Bunds was at 343 basis points (bps), after
falling to 334 bps -- its lowest since the end of March. Greek
10-year yields were closed at 409 bps on Friday.
"It's a question of how far Greek government debt can
normalise now," said a bonds trader in London.
Athens will test market appetite for its debt with an
auction of 1.2 billion euro Treasury bills on Tuesday and is
still planning a dollar bond.
Yields on 10-year benchmark U.S. Treasuries <US10YT=RR> were
up 1 basis point at 3.898 percent, while those on 10-year Bunds
<EU10YT=RR> were up 2 bps at 3.191 percent.
Oil prices <CLc1> slipped to trade below $85 a barrel.
Offshore Chinese yuan forwards edged down against the dollar
after Beijing reported its first monthly trade deficit in six
years, which may decrease expectations for a rise in the yuan.
(Additional reporting by Natsuko Waki and William James in
London, and Chen Yixin and Karen Yeung in Shanghai, editing by
Mike Peacock and Toby Chopra)
