* Greek package triggers broad buying in euro
* But German finance ministry comments spark caution
* Euro still faces hurdles in medium term
(Updates with fresh prices, adds detail)
By Natsuko Waki
LONDON, April 12 (Reuters) - The euro hit its highest in
nearly a month against the dollar on Monday after euro zone
finance ministers agreed a rescue package for Greece, but gains
were pared after cautionary comments from Germany.
The ministers approved a 30 billion euro ($40.5 billion) aid
package of loans, which Greece could tap if needed, with at
least 10 billion euros also expected from the International
Monetary Fund. []
The massive financial safety net boosted investor appetite
for riskier assets, briefly helping the Australian dollar to its
highest in five months.
However, comments from the German finance ministry injected
some uncertainty. A spokesman said a summit of European leaders
would be needed to activate aid for Greece and the German
Bundestag would also need to be consulted. []
The European Commission said no leaders' summit would need
to be called to activate the aid.
"They 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. It doesn't completely
set out the framework the market wants to see," said Adam Cole,
global head of FX strategy at RBC Capital Markets.
"Uncertainty associated with the euro still exists."
The euro rose as high as $1.3691 <EUR=>, its highest since
mid-March, before trimming gains to the session low of $1.3588
in Europe. It was up 0.7 percent on the day by 1105 GMT at
$1.3595.
Traders in Europe reported option-related orders either side
of $1.3600 shackling the rate ahead of the New York cut. Stops
were, however, said to be building through $1.3570 and $1.3550.
The single currency earlier rose more than 1 percent to
127.45 yen <EURJPY=R>.
Greek borrowing costs eased, driving the premium investors
pay to hold 10-year benchmark Greek debt rather than German
paper to 334 basis points from Friday's 409 bps [].
Greece will test market appetite for its debt further with
an auction of 1.2 billion euros of Treasury bills on Tuesday
[].
The single currency is still down more than 4 percent
against the dollar and yen since January, making it one of the
biggest underperformers among major currencies this year.
"The EU deal should get Greece past the April and May
refunding hump but beyond that the outlook still looks grim as
the economy sets course for a sharp contraction. Participants
still have good reason to tread cautiously versus the euro,"
Lloyds TSB said in a note to clients.
Greece needs to roll over 3.85 billion euros of maturing
bills this month and refinance 8.2 billion euros of a five-year
bond maturing later in April.
AUSSIE GIVES UP GAINS
The high-yielding Australian dollar briefly rose as high as
$0.9382 <AUD=D4> on better risk appetite in Asia before
retreating to $0.9265 in Europe. Good demand was noted for
short-dated $0.9200 option strikes on the way down.
The dollar fell 0.7 percent against a basket of major
currencies <.DXY> as a week of major first-quarter earnings
kicked off.
The yen fell 0.4 percent to 93.57 per dollar <JPY=> with a
possible revaluation in China's yuan currency in focus. Chinese
President Hu Jintao visits Washington this week for a nuclear
security summit. He is expected to hold a one-on-one meeting
with U.S. President Barack Obama on Monday.
