Euro pushes higher over news of rescue deal for Cyprus

The euro rose on Monday after Cyprus clinched a deal with international lenders for a 10 billion euro bailout aimed at saving the country from financial meltdown, Reuters reported.

The single currency rose 0.4 percent to $1.3040, pulling away from a four-month low of $1.28435 set last Tuesday. Against the yen, the euro climbed 0.7 percent to 123.60 yen.

The deal for Cyprus, which was swiftly endorsed by euro zone financeministers, includes plans to shut down the country's second largest bank in return for a 10 billion euro ($13 billion) bailout.

The plan involves winding down Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a "good bank".

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalize the Bank of Cyprus.

The agreement came hours before a deadline to avert a collapse of the banking system in Cyprus. Until a deal was reached, there had been concerns that Cyprus might have been forced to exit the euro zone.

Analysts said the euro might rise to around $1.3100 to $1.3150 in the near term as investors pare back bearish bets versus the single currency.

Market expectations for the Bank of Japan to unveil aggressive monetary stimulus at its next scheduled policy meeting on April 3-4, the first under new BOJ Governor Haruhiko Kuroda, are seen likely to support the dollar against the yen in the near term.