Dollar gains as hopes for Europe debt plan fade

AP News
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Posted: Oct 17, 2011 4:48 PM
Dollar gains as hopes for Europe debt plan fade

The dollar rose against the euro Monday after Germany said there would be no quick fix to the European debt crisis.

The euro had risen 4 percent against the dollar last week on hopes that a major plan to stem the crisis would be finalized soon.

But German finance chief Wolfgang Schaeuble said Monday that European leaders will not have a "definitive solution" when they meet this weekend. He said that the leaders will likely adopt a five-point plan to address the debt crisis, but that more work would still need to be done. Currency investors had expected a comprehensive plan to be announced after an Oct. 23 European Union summit in Brussels.

"These recent comments illustrate how much of a challenge it is to come up with a plan that all 17 eurozone nations find agreeable," said Kathy Lien, director of currency research at the online currency trading firm GFT.

In late trading Monday, the euro fell to $1.3742 from $1.3875 late Friday. The British pound fell to $1.5753 from $1.5815. The dollar rose to 0.8990 Swiss franc from 0.8930 Swiss franc and to 1.0201 Canadian dollar from 1.0117 Canadian dollar. However, the dollar slipped to 76.82 Japanese yen from 77.22 Japanese yen.