Dollar rises as hopes fade for Europe crisis fix

AP News
Posted: Sep 30, 2011 4:55 PM
Dollar rises as hopes fade for Europe crisis fix

The dollar was mostly higher against other major currencies Friday as investors began to doubt that European officials will fix the region's debt crisis as quickly as they thought.

Reports that a sweeping plan to contain the European debt crisis was in the works helped the euro post gains against the dollar earlier in the week.

But, with no announcement of a deal from European leaders, the euro has given up some of its gains.

In late trading Friday, the euro fell to $1.3424 from $1.3559 Thursday. The euro fell 1 percent against the dollar since Monday and is down nearly 7 percent from the beginning of the month.

Concerns of a global slowdown intensified Friday as data from China showed manufacturing activity this month was flat from the month before. The monthly purchasing managers index, released by HSBC, was flat at 49.9 in September. A reading below 50 indicates that activity is contracting.

"Some analysts have significantly revised down their growth expectations for China, which is starting to spook investors," said analyst Kathleen Brooks in a note to clients.

In times of global turmoil, investors tend to buy the dollar because they consider it a safe haven currency. On Friday, the dollar index, which measures the greenback against six other currencies, rose over 1 percent.

In other trading Friday, the British pound rose to $1.5626 late Friday from $1.5590 Thursday. The dollar rose to 77.08 Japanese yen from 76.71 Japanese yen, to 0.9051 Swiss franc from 0.8994 Swiss franc and to 1.0438 Canadian dollar from 1.0395 Canadian dollar.