Euro hits 7-week high vs dollar on crisis plan

AP News
Posted: Oct 27, 2011 7:37 PM
Euro hits 7-week high vs dollar on crisis plan

The euro reached hit a seven-week high against the dollar Thursday after European leaders reached a deal to avert Europe's debt crisis.

European leaders decided Thursday to expand their regional bailout fund. Banks holding Greek debt agreed to take bigger losses. The deal signals progress toward solving the two-year crisis before it can spread to larger economies such as Spain and Italy.

The euro rose to $1.4216 late Thursday from $1.3908 late Wednesday. Earlier, the euro rose to $1.4246 _ its highest point since Sept. 6.

The Dow Jones industrial average rose nearly 3 percent and global markets also rallied Thursday.

"Investors around the world are cheering the fact that the Europeans have sucked it up and did what was necessary to mitigate a deeper crisis in the region," said Kathy Lien, director of currency research at GFT.

Optimism that Europe might be close to stemming the debt crisis sent the U.S. dollar falling against most other currencies. The dollar hit a new record low against the Japanese yen, sinking to 75.63 yen at one point Thursday. By the end of the day the dollar was worth 75.94 yen, down from 76.20 yen late Wednesday.

In other trading, the British pound rose to $1.6121 late Thursday from $1.5965 Wednesday. The dollar fell to 0.8593 Swiss franc from 0.8817 Swiss franc and to 99.07 Canadian cents from 1.0060 Canadian dollar.