Euro falls on Europe downgrade warning report

AP News
Posted: Dec 05, 2011 3:40 PM
Euro falls on Europe downgrade warning report

The euro turned lower against the dollar Monday on reports that ratings agency Standard & Poor's is warning all 17 countries that use the euro that their credit ratings may be lowered.

The euro fell to $1.3382 in late trading Monday from $1.3406 late Friday.

The euro was higher earlier in the day on hopes that European leaders meeting this week will agree on a plan to save the region's shared currency.

On Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy said they support a new European Union treaty that would punish countries that overspend. The treaty is meant to prevent another debt crisis. Traders have been worried that Europe's debt crisis could lead to a collapse of the euro.

In Italy, new Prime Minister Mario Monti briefed lawmakers on a new austerity package which includes $40.5 billion in spending cuts and $13.5 billion in tax hikes. The package takes effect immediately, but Parliament must still approve it within 60 days.

In other trading Monday, the British pound rose to $1.5644 from $1.5598. The dollar fell to 77.77 Japanese yen from 78.03 Japanese yen, to 0.9205 Swiss franc from 0.9208 and to 1.0171 Canadian dollar from 1.0178 Canadian dollar.