By Candice Zachariahs and Yasuhiko Seki April 12 (Bloomberg) -- The euro surged to the highest level in more than three weeks against the dollar after European governments offered Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates. South Korea’s won rose to its strongest in more than 18 months as the nation’s central bank raised its economic forecast and Asian equities reached a 20-month high. The euro climbed, after last week dropping to within one cent of an 11-month low, as futures traders lowered from a record bets that Europe’s common currency would slide. “In an environment where currency speculators are very short euro, news about a detailed European Commission- International Monetary Fund package could be the circuit breaker,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia. “This week is going to be quite strong for the euro.” The euro gained 1.2 percent to $1.3659 as of 1:31 p.m. in Tokyo and touched $1.3677, the most since March 18. Last week, the euro traded at $1.3283, less than a quarter of a cent above $1.3268, the lowest level since May 7, 2009. It rose 1.1 percent, the most since March 31, to 127.19 yen. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, fell 1.1 percent, the most since July 2009. The dollar traded at 93.11 yen from 93.18 yen last week. The MSCI Asia Pacific Index of shares rose 0.7 percent and touched 129.21, the highest level since August 2008. ‘Huge Amount’ After Greek borrowing costs surged to an 11-year high, euro-region finance ministers said they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent interest. That’s less than the current three-year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund. “This is a huge amount,” said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. “This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run the market is short Greek assets so we’ll get a rally in those.” The package may lend longer-term strength to the euro “if it draws a line under sovereign problems,” driving it toward $1.38 to $1.40 this week, Commonwealth’s Capurso said. Futures traders decreased bets the euro will fall against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission showed. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so-called net shorts -- was 67,223 on April 6, compared with net shorts of 85,326 a week earlier. Korea Growth “Some of the structural problems exposed by the whole Greece episode still very much remain in place,” said John Horner, a currency strategist in Sydney at Deutsche Bank AG, in a Bloomberg Television interview. “Question marks about monetary union in the absence of political and fiscal union” will limit gains to $1.40, with the euro falling to the mid- $1.30s “reasonably swiftly,” he said. The won rose a second day as the Bank of Korea said gross domestic product will expand this year at the fastest pace since 2006. The currency rose 0.4 percent to 1,113.25 and touched 1,111.38, the most since September 2008. Trading in currency options shows that emerging economies have become safer relative to developed nations than at any time in almost two years. Depreciation Option “The global perception of risk is changing,” said Jerome Booth, who helps manage $32 billion in emerging-market assets as the head of research at Ashmore Investment Management Ltd. in London. “Where you want to be is non-leveraged places, and that means anything in emerging-markets. This is a start of a trend. The rally in emerging-markets has barely started yet.” A record U.S. budget deficit, Europe’s bailout of Greece and the prospect of a hung parliament in the U.K. are increasing the risk of losses in dollars, euros and pounds. In developing markets, the deficit fell to one-third the level of advanced nations this year and the economies are growing twice as fast as the U.S., the International Monetary Fund says. The pound ‘weakened against 14 of its 16 most-traded counterparts in the past three months and billionaire investor George Soros said the next U.K. government after the May 6 election should decide whether to allow a further devaluation of the British currency to assist a recovery. Britain “has more room to use exchange rate adjustments as a way of adjusting the economy” than do nations using the euro, Soros said in an interview on April 9 in Cambridge, England. “It’s a question for the next government to decide. It has a number of options, of which a currency depreciation is one.”

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