Dollar nearly flat against the euro

AP News
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Posted: Mar 09, 2011 3:48 PM
Dollar nearly flat against the euro

The dollar was essentially flat in trading against the euro Wednesday.

The euro edged up to $1.3904 late Wednesday from $1.3903 Tuesday. The euro has fallen this week on renewed worries about Europe's debt problem after reaching $1.4036 Monday on hopes that the European Central Bank will lift interest rates.

In a bond auction Wednesday morning, Portugal had to pay far more to borrow from the markets than it did six months ago, heightening concerns that it will need emergency aid. Higher borrowing costs could mean that countries like Portugal and Greece will have a harder time getting themselves out of the debt mess they are in.

Greece said on Wednesday that its unemployment rate jumped to 14.8 percent in December, up from 13.9 percent in the previous month. On Monday Moody's ratings agency downgraded Greece's debt grade below junk status.

Investors are concerned that a meeting later this month in Brussels will not result in a solution to the lingering debt issue.

Meanwhile in the Middle East, the conflict in Libya continued to keep crude prices high, trading above $105 in afternoon trading in New York. Traders are worried that the uprisings in Tunisia, Egypt and Libya could spread to Saudi Arabia, the world's largest crude exporter.

In the U.S., mortgage applications jumped last week, but analysts warned that the increase was likely driven by investors and not first-time homebuyers who are needed to help the housing market recover.

In other trading Wednesday, the British pound rose to $1.6192 from 1.6160. The dollar rose to 82.70 Japanese yen from 82.65 Japanese yen and fell to 0.9302 Swiss franc from 0.9356 Swiss franc.

The U.S. currency fell to its lowest level against the Canadian dollar Wednesday since November 2007 at 96.88 Canadian cents. That's down from 97.14 Canadian cents late Tuesday.