(Refiles to add dropped word in thirs paragraph)
* Euro rises to highest level vs dollar in nearly a month
* Greek package, while good news, still needs clarity
* Short-term unwinding of euro shorts likely
* (Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 12 (Reuters) - The euro advanced to its highest level against the U.S. dollar in nearly a month on Monday after euro zone finance ministers agreed on a financial aid package for Greece.
The finance ministers approved a 30 billion euro ($40.5 billion) rescue package of loans, which Greece could tap if needed. At least 10 billion euros are also expected from the International Monetary Fund.
The euro zone currency, however, pared gains as investors sought details about the plan. Analysts also said the bailout package was not a game-changer for the euro and many still expect the currency to head lower in the next few months.
"The package has the size and terms the market wanted to see and it came quicker than expected," said Jens Nordvig, senior currency strategist at Nomura Securities in New York.
"There is still procedural uncertainty about activation and disbursement, but the bottom line is that we now have something concrete for the first time in this saga, and that should be important for markets."
The massive financial safety net boosted investor appetite for riskier assets, lifting U.S. stocks and briefly helping the Australian dollar rise to its highest in five months, before it fell later in the session.
Investors, however, were still cautious, prompted in part by the need for clarification of details on how the aid mechanism could be activated.
Christoph Steegmans, a German government spokesman, said on Monday that euro zone leaders, not those of the full European Union, would need to meet to activate the aid package for debt-ridden Greece. Earlier, Steegmans had said such a decision would require a full meeting of EU leaders.
When asked by Reuters to clarify the point, he said a meeting "of government leaders from euro zone countries" would be needed.
EURO RALLY NOT "EARTH-SHATTERING"
The euro rose to $1.3691, its highest since mid-March, according to Reuters data, before trimming gains to $1.3581 in late afternoon, up 0.6 percent on the day. From trough to peak, the euro has climbed about 4 cents since last Thursday.
"That said, the euro/dollar rally has not been earth-shattering and that fits with the notion that there are medium-term asset allocation shifts at play, a negative for the euro," said Nordvig of Nomura Securities.
"I am pretty comfortable with (Nomura's) existing path for euro/dollar, which sees a moderate move lower in Q2 to $1.32, followed by a further slight decline in Q3 to $1.30."
Analysts also expect short-term unwinding of net euro short positions, which were reduced slightly after hitting record highs a few weeks ago. That could probably take the euro to $1.38-$1.40 in the short term.
The single euro zone currency is still down more than 5 percent against the dollar and 4.6 against the yen in 2010 to date, making it an underperformer among major currencies.
The high-yielding Australian dollar briefly rose as high as US$0.9382 on improved risk appetite in Asia before retreating to US$0.9285, down 0.5 percent.
The dollar rose 0.1 percent against the yen to 93.25 yen,with a possible revaluation in China's yuan currency in focus. Chinese President Hu Jintao visits Washington this week for a nuclear security summit and is expected to hold a one-on-one meeting with U.S. President Barack Obama on Monday.
Currency investors are also likely to focus on first-quarter U.S. corporate earnings, which unofficially starts with the release of Alcoa Inc. results on Monday.
"If earnings are healthy, stocks could extend their gains, which will help sustain risk appetite in the forex market. With the VIX index falling to the lowest level (since July 2007), equity investors are optimistic and not anticipating any major surprises," said Kathy Lien, director of FX research at GFT in New York.