Euro falls against dollar after big gain

AP News
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Posted: Oct 28, 2011 5:06 PM
Euro falls against dollar after big gain

The euro fell against the dollar Friday after Fitch ratings agency said the deal reached by European leaders to cut Greece's debt load would constitute a default for the country.

The plan that was agreed upon Thursday asks Greece's private creditors to take losses of 50 percent on their holdings of the country's bonds, which is meant to lower Greece's debt burden.

Fitch said that even with the deal, Greece would still have a large amount of outstanding debt. The ratings agency also said that the country's growth prospects remain weak.

The euro fell to $1.4153 late Friday from $1.4216. On Thursday, the euro hit a seven-week high of $1.4246 after European leaders announced the deal.

Optimism faded as investors realized that the region would still face a number of challenges. European leaders offered little details on how the plan would work, and investors were left wondering how it would be implemented.

"After yesterday's stunning rally, the holes in the eurozone debt rescue deal are starting to attract attention," said Kathleen Brooks, research director at FOREX.com.

In other trading, the British pound fell to $1.6119 from $1.6121 late Thursday. The dollar rose to 0.8621 Swiss franc from 0.8593 Swiss franc and to 99.34 Canadian cents from 99.07 Canadian cents. The dollar fell to 75.75 Japanese yen from 75.94 yen.