The euro advanced for a third straight week against the dollar in the longest stretch of gains since June after European leaders agreed to a recapitalization of banks and voluntary losses for holders of Greek debt.
The euro rallied the most in more than a year against the dollar after European leaders agreed to expand a rescue fund for indebted nations and reached an accord with lenders on writedowns for Greek debt.
The dollar rose against all of its major counterparts after the Federal Reserve’s plan to shift holdings of Treasuries to keep the economy from falling into recession increased the refuge appeal of the currency.
The euro weakened against the dollar as currency-market traders moved to protect themselves from the risk that Federal Reserve Chairman Ben S. Bernanke will signal additional steps to bolster the U.S. economy.
The euro broke through the 14-month low reached last week against the dollar on concern European nations’ debt-cutting measures to avoid using an almost $1 trillion bailout plan announced this week will undermine growth.