Dollar rises against euro on European debt worries

AP News
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Posted: Apr 18, 2011 3:54 PM
Dollar rises against euro on European debt worries

The dollar rose against the euro Monday on speculation that Greece will have to restructure its debt.

The U.S. currency also advanced against the British pound, Swiss franc and Canadian dollar even as the ratings agency Standard & Poor's lowered its outlook for U.S. sovereign debt. It lost ground against the Japanese yen, however.

Greece's central bank governor said a debt restructuring would have "disastrous consequences" for the nation's access to credit and that the move would be "unnecessary and undesirable."

The euro fell to $1.4234 late Monday from $1.4436 late Friday.

Standard & Poor's Ratings Service downgraded its outlook on U.S. sovereign debt, saying there is a one in three chance it will downgrade the rating on the debt in the next two years. It reaffirmed its current top rating on the actual debt, however.

The lower outlook "is U.S. dollar negative," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "But it hasn't been able to reverse the downward euro trend."

Besides Greece, investors were also concerned about an election in Finland where a party that opposes eurozone bailouts had a strong showing. The election results could complicate future bailouts for Portugal or other countries.

In other trading Monday, the British pound fell to $1.6255 from $1.6309 late Friday. The dollar fell to 82.71 yen from 83.13 yen.

The U.S. currency rose to 0.8967 Swiss franc from 0.8929 Swiss franc, and also rose to 96.44 Canadian cents from 96.06 Canadian cents.