Euro gains on China easing, bailout news

London: The euro rose Monday after China eased monetary policy to stimulate growth and expectations mounted that Eurozone policymakers were set to approve Greece\'s long-awaited second bailout, averting a messy default. Analysts said gains would be limited until the €130-billion (Dh629 billion) bailout deal was signed off by Eurozone finance ministers later yesterday, given numerous delays in recent weeks. Although financing gaps remained, a Eurozone official said they were not so large as to risk derailing the process. The euro was seen as likely to rally in the immediate wake of a deal being signed, although it could run out of steam near the 2012 high around $1.3322 as the package was not expected to resolve Greece\'s underlying economic problems. Reserve requirements The single currency was up 0.3 per cent at $1.3191, retreating from a one-week high of $1.3238. Riskier assets, including stocks and commodity currencies, also rallied after China\'s central bank cut reserve requirements by 50 basis points over the weekend. Trade was expected to be subdued with US markets closed for a public holiday, potentially exaggerating any price moves. \"News about China reserve requirements and once again hopes that they [the Eurozone] will reach an agreement with Greece are giving a positive opening to markets,\" said Niels Christensen, FX strategist at Nordea. \"I think we will see a rally, but not a strong rally because we\'ve been trading this topic for a long time. Even if we get a deal there are still issues about restructuring and how the portfolio of Greek bonds at the ECB will be dealt with.\" Debt swap One of the terms of the deal will be a debt swap with private holders of Greek government bonds. The European Central Bank is weighing up whether to allow Greek bonds held by national Eurozone central banks to be subject to the same writedowns as private investors. Although strategists saw a euro rally as limited, data from the Commodity Futures Trading Commission released on Friday showed e