Sterling fell against the euro on Monday, retreating from a seven-week high as the single European currency gained after eurozone finance ministers agreed a standby rescue package for debt-ridden Greece. Despite its losses against the euro, the pound hit its highest versus the dollar since February as the US unit slumped broadly as news of the aid plan increased demand for riskier assets, tarnishing the dollar's safe-haven appeal.
Eurozone finance ministers at the weekend approved a 30 billion euro ($40.5 billion) package of loans for Greece if it needed help in tackling its debts, with at least 10 billion euros also expected from the International Monetary Fund.
Sterling extended last week's short-covering rally versus the dollar as speculators continue to unwind bets for more pound weakness. The latest data shows such positions further decreased last week from a record high in March. By 1019 GMT, the euro traded 0.4 percent higher on the day at 88.14 pence, having shot up to 88.48 pence in earlier trade to hit its highest in roughly a week.
Details of the Greece bailout helped the euro to recover from its slide to 87.05 pence on Friday, its weakest since mid-February. But it trimmed some gains after Germany said a summit agreement would be needed to activate an aid plan, and that its lower house of parliament would have to be consulted on such help, highlighting ongoing uncertainties clouding the issue.
The euro's rally created a gap between its closing price against sterling on Friday of 87.75 pence and its opening price of 88.23 on Monday according to Reuters charts. Sterling traded 0.3 percent higher at $1.5425. Earlier in the day it climbed as high as $1.5486, its highest since late February.