Dollar gains against euro on Ireland downgrade

AP News
Posted: Jul 12, 2011 5:21 PM
Dollar gains against euro on Ireland downgrade

The dollar rose against the euro in after-hours trading Tuesday after a ratings agency downgraded Ireland's credit rating.

Moody's Investors Service downgraded Ireland's credit rating to junk Tuesday saying that there's a growing possibility that the country will need further financing.

The downgrade comes as concern about the European debt crisis was heightened this week on fears that the crisis could spread to Italy and Spain, the currency union's third- and fourth-largest economies.

Euro trading was volatile Tuesday. It fell as low as $1.3836 overnight _ the euro's weakest point since early March. By late Tuesday it had bounced back to $1.4035 after minutes from the Federal Reserve's latest meeting revealed that members debated whether additional stimulus is needed to help the economy. But the euro weakened again versus the dollar after the Moody's announcement.

The euro fell to $1.3968 in after-hours trading from $1.4024 late Monday. It traded above $1.45 as recently as a week ago.

In other trading, the British pound rose to $1.5939 late Tuesday from $1.5912 late Monday. The dollar fell to 79.43 Japanese yen from 80.13 Japanese yen, fell to 0.8299 Swiss franc from 0.8351 Swiss franc and fell to 96.37 Canadian cents from 96.81 Canadian cents.