Dollar strengthens against euro on European debt

AP News
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Posted: May 25, 2011 4:03 PM
Dollar strengthens against euro on European debt

The dollar rose against the euro Wednesday as worries about Europe's debt problems increased.

The euro made back some ground from sharp losses earlier in the day, however, as no news developed on Greece restructuring or defaulting on its debt.

The dollar was mixed against most other major currencies after data from the U.S. showed that businesses cut back on their orders for heavy machinery, airplanes, automobiles and computers in April.

Besides the euro, the dollar also rose against the yen, but fell against the pound and Swiss franc.

Greece is still struggling a year after receiving a 110 billion euro ($155 billion) emergency loan package. European Union officials want more economic reforms and government spending cuts before approving additional aid. The government's moves have angered Greek citizens.

Investors are also wary that the country could default on its debt despite help from neighbors, intensifying problems for other indebted European countries.

On Tuesday, Greek European Union commissioner Maria Damanaki warned in a statement that "The scenario of removing Greece from the euro is now on the table." Greece's Prime Minister has said that he is determined to keep Greece in the eurozone.

The euro fell to $1.4079 in late trading in New York on Wednesday from $1.4113 late Tuesday. It fell as low as $1.4012 earlier in the day. The dollar edged up to 81.97 Japanese yen from 81.90 yen.

In the U.S., the Commerce Department said that orders for durable goods fell 3.8 percent in April, a sign that the economy's recovery could be stalling.

In other trading Wednesday, the dollar fell to 0.8729 Swiss franc from 0.8793 Swiss franc Tuesday.

The British pound rose to $1.6279 from $1.6148 after the U.K. government said strong exports supported the economy's growth.

The dollar was also weaker against currencies in Norway and New Zealand, but stronger against those in Australia, South Korea and Hong Kong.