The Associated Press December 1, 2010, 1:14PM ET

Euro soars on possible US support for more IMF aid

The euro soared Wednesday after a report that the U.S. would support a larger aid package for Europe through the International Monetary Fund.

In midday trading in New York, the euro rose as high as $1.3180 just after the report. Late Tuesday it was worth $1.3011.

Reuters reported at midday that an unnamed U.S. official said the U.S. would be willing to have the International Monetary Fund give more money to the European Financial Stability Facility.

The U.S. is the IMF's biggest stakeholder.

The Obama administration would not comment on the report. Treasury Secretary Timothy Geithner did dispatch Treasury Undersecretary Lael Brainerd, Treasury's top official on international matters, for talks with European officials. Brainerd had meetings in Madrid with economic officials on Wednesday and was scheduled to be in Berlin on Thursday and Paris on Friday.

The euro has fallen 10 percent since early November as Ireland, after Greece, accepted billions in emergency financing. Investors now worry Portugal may be next, or even Spain. Spain, due to the size of its economy, would be a much greater financial burden that the other countries should it require a bailout.

A spokesman for the EU's monetary affairs chief Olli Rehn said he had not heard of talks about extending the EFSF fund.


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