Concerns about global growth boost dollar

AP News
Posted: Jul 05, 2011 3:25 PM
Concerns about global growth boost dollar

The dollar rose against the euro, yen and pound Tuesday as investors sought safety in the world's most heavily traded currency.

Worries about the economy in Europe and China helped to push the dollar.

In late trading Tuesday in New York, the euro dropped to $1.4410 from $1.4544 Monday. The dollar rose to 81.04 Japanese yen from 80.78 yen. The British pound fell to $1.6047 from $1.6096.

Against six of the world's most actively traded currencies, the dollar rose 0.6 percent.

Brown Brothers Harriman currency analysts said investors are concerned about the fate of a second round of emergency aid needed to keep Greece from defaulting on its debt.

The credit ratings agency Standard & Poor's warned on Monday that a plan backed by European politicians to include private-sector lenders in the new aid package would likely be a default. Central bankers do not want a default, which could unleash a crisis in financial markets.

Also on Tuesday, a report said retail sales in the 17 countries that use the euro dropped 1.1 percent in May, the latest sign of slowing economic growth.

There are worries as well about slower growth in China, the world's No. 2 economy, where inflation poses a danger. Barclays economist Jian Chang expects an interest rate increase in July. That could weigh on growth and hurt the companies around the world that sell goods to China.

In other trading Tuesday, the dollar rose to 96.29 Canadian cents from 96.09 Canadian cents Monday, but fell to 0.8404 Swiss franc from 0.8477 Swiss franc.