Dollar mixed on US data, European debt worries

AP News
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Posted: Oct 19, 2011 6:01 PM
Dollar mixed on US data, European debt worries

Currency trading was choppy Wednesday as investors fretted over the European debt crisis and considered mixed U.S. economic reports.

French President Nicolas Sarkozy said that talks about a plan to stem the region's debt crisis have stalled. Sarkozy met with German Chancellor Angela Merkel Wednesday ahead of a European summit this weekend.

Merkel said that the Oct. 23 summit "will not be the end point of regaining trust. It will be a point at which we act, but much more will follow." The euro rose 4 percent last week on expectations that a comprehensive plan would be announced following the summit, but hopes began to fade this week after German officials cooled expectations.

The euro was unchanged at $1.3747 late Wednesday after rising 0.9 percent earlier in the day.

In the U.S., the government said homes were built in September at the fastest pace in 17 months, a hopeful sign for the struggling housing market. Builders began work on 658,000 homes, the Commerce Department said.

Separately, the government said consumer prices increased more slowly in September than the month before. The Consumer Price Index rose 0.3 percent in September, below a 0.4 percent rise in August, according to the Labor Department.

The encouraging data was offset by a gloomier view of the economy from the Federal Reserve. A report known as the Beige Book found that businesses in some areas of the country were holding back spending because they were unsure of the economic outlook.

In other trading Wednesday, the British pound rose to $1.5764 from $1.5734 late Thursday. The dollar rose to 0.9032 Swiss franc from 0.8981 Swiss franc and to 1.0194 Canadian dollar from 1.0162 Canadian dollar. The dollar was practically unchanged at 76.78 Japanese yen compared to 76.76 Japanese yen.