Dollar strengthens against euro

AP News
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Posted: May 13, 2011 3:46 PM
Dollar strengthens against euro

The dollar rose against the euro late Friday. It was down earlier in the day after stronger-than-expected reports on European economic growth and an inflation report in the U.S. that was in line with expectations.

The dollar was also stronger against other major currencies, including the British pound, Swiss franc and Canadian dollar. It was weaker against the Japanese yen.

The eurozone's economy expanded at a quarterly rate of 0.8 percent in the first three months of the year, more than double the 0.3 percent growth posted in the previous quarter and topping economists' expectations.

The German economy, Europe's biggest, grew by 1.5 percent in the quarter, faster than expected.

The "very strong numbers" will benefit the euro, said Mark McCormick, currency strategist at Brown Brothers Harriman. He said the dollar rose on Friday because traders were unwinding their positions on the dollar.

The euro fell to $1.4110 in late afternoon trading Friday from $1.4231 late Thursday. A little over a week ago the euro was worth as much as $1.49.

Despite the better-than-expected data from the eurozone, worries about the region's debt crisis continued. The European Union warned Friday that Greece's debt is growing faster than had been forecast. Greece and Ireland received hefty bailouts last year. Portugal is expected to be the third to get a bailout when EU finance ministers meet this month to approve a 78 billion euro package.

In the U.S., the Labor Department said the Consumer Price Index increased 0.4 percent in April, matching expectations.

In other trading Friday, the British pound fell to $1.6174 from $1.6286 late Thursday. The dollar rose to 0.8923 Swiss franc from 0.8851 Swiss franc and rose to 96.82 Canadian cents from 96.32 Canadian cents.

The dollar fell to 80.84 Japanese yen from 80.91 Japanese yen.

The U.S. currency was stronger against most other currencies; including those in Australia, Norway, South Korea and Latin America.