The euro and Asian shares rose on Monday after EU sources said the Cyprus president, the European Union, ECB and the IMF have agreed the outlines of a rescue deal to avert financial meltdown on the island.
The outlines include the creation of a "good bank" and a "bad bank" and the shutting down of second largest lender Popular Laiki, and were agreed in late night talks in Brussels by Cypriot President Nicos Anastasiades in negotiation with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.
The plan will now be presented to euro zone finance ministers for discussion.
The euro rose to $1.3050 from around $1.2980, moving away from a four-month low of $1.2844 hit on Tuesday.
Spot gold fell 0.3% to $1,603.81 an ounce as the euro advanced.
The euro also drew support from repatriations by Europeans ahead of the end of the first quarter, potentially positioning the common currency to hit $1.3100.
The MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.5%, after nearing its lowest level in three months struck earlier last week on Friday.
S&P 500 stock index futures were up 0.3% as trading resumed, while S&P E-mini futures were also 0.3% higher.
The EU had given Cyprus until Monday to raise the 5.8 bln euros it needs to secure an international lifeline in order to secure a further 10 bln euro bailout. Without the aid, the European Central Bank would cut funds to Cypriot banks and the country may have been forced to exit the euro.
Some analysts say contagion would be limited given that Cyprus accounts for just 0.2% of the euro zone's economic output. European financial markets have traded in relative calm since the Cyprus crisis erupted.
Australian shares extended gains after the Cyprus news, on top of support from bargain hunters following last week's fall and a recovery in iron ore prices.
South Korean shares opened 1% higher, after closing the previous week at a 5-week low. Japan's Nikkei stock average opened up 1.4% after tumbling 2.4% on Friday.
The dollar was up 0.4% at 94.83 yen, after hitting a low of 94.195 on Friday. Against a basket of key currencies, the U.S. currency was down 0.6%.
U.S. crude futures edged up 0.2% to $93.93 a barrel.
Market sentiment on Friday was partially lifted when hopes rose that Italy could end the political deadlock left by last month's inconclusive elections after President Giorgio Napolitano asked centre-left leader Pier Luigi Bersani to assess whether he can win enough support in Italy's divided parliament to form a government.
