Dollar mixed on deeper trade deficit, Greece woes

AP News
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Posted: May 11, 2011 5:03 PM
Dollar mixed on deeper trade deficit, Greece woes

The dollar was mixed against major currencies Wednesday after a report showed a growing U.S. trade deficit.

The euro slid amid concerns about Greece's ability to shrink its debts as strikers marched in Athens to protest government spending cuts. Greek citizens are angry about the cuts that European officials and the International Monetary Fund have demanded in exchange for aid. European officials have said that a second round of emergency aid for Greece is contingent in part on getting economic reforms implemented.

Investors hope more emergency aid for Greece will help stave off a debt restructuring that could harm the European banking sector, which holds Greek bonds.

The euro dropped to $1.4196 late Wednesday from $1.4396 Tuesday. It was worth more than $1.49 just one week ago.

The dollar cut some of its losses against other currencies but retreated against the yen after the government said the U.S. trade deficit rose 6 percent $48.2 billion in March, the highest level since June 2010. The dollar's decline this year helped bolster U.S. exports, but surging oil prices pushed up imports.

The deeper deficit could weigh on economic growth in the U.S. Growth generally slows when imports outpace exports because more jobs go abroad.

The British pound move above $1.65 early in the day but fell to $1.6343 in late trading, down from $1.6349 late Tuesday. The dollar traded at 80.97 Japanese yen after peaking above 81 yen earlier in the day. The dollar was worth 80.78 yen late Tuesday.

In other trading, the dollar rose to 95.97 Canadian cents from 95.89 Canadian cents and gained to 0.8843 Swiss franc from 0.8811 Swiss franc.