Euro rises against dollar despite Greek debt worry

AP News
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Posted: Apr 19, 2011 4:18 PM
Euro rises against dollar despite Greek debt worry

The euro rebounded against the dollar Tuesday even as speculation persisted that Greece will need to restructure its debt.

The dollar was also lower against the British pound, Japanese yen and Canadian dollar. Tuesday's weakening of the dollar comes a day after Standard & Poor's Ratings Service downgraded its outlook on U.S. sovereign debt.

The euro rose to $1.4340 late Tuesday, up from $1.4234 late Monday.

Greek officials have denied they would need to restructure their debts, but the market continues to speculate that it will need to. On Tuesday, the country had to pay a higher rate in a treasury bill auction, increasing that assumption.

"Comments continue to emerge from European policymakers but no consensus is yet apparent and markets are driven by speculation," said UBS analyst Chris Walker in a research note.

Meanwhile in the U.S., Treasury Secretary Timothy Geithner played down Standard & Poor's decision to lower its outlook on U.S. sovereign debt. Geithner said in a televised interview Tuesday that he disagreed with the decision and said the government would "get ahead" of the problem.

Standard & Poor's Ratings Service said Monday there is was a one in three chance it will lower the rating on the debt in the next two years. It reaffirmed its current top rating on the actual debt, however.

In other trading Tuesday, the British pound rose to $1.6317 from $1.6255. The dollar fell to 82.37 Japanese yen from 82.71 Japanese yen, and fell to 95.69 Canadian cents from 96.44 Canadian cents.

The dollar rose to 0.8993 Swiss franc from 0.8967 Swiss franc late Monday.