Euro falls to 16-month low against dollar

AP News
Posted: Jan 06, 2012 3:30 PM
Euro falls to 16-month low against dollar

The euro fell to a 16-month low against the dollar after the U.S. said the unemployment rate dropped last month. Traders also bought the U.S. currency as borrowing rates in Italy spiked Friday.

The Labor Department said U.S. employers added 200,000 net jobs in December. The unemployment rate fell to 8.5 percent, the lowest since February 2009. That's a sign that the job market is slowly improving.

The euro fell to $1.2724 in late trading Friday from $1.2782 late Thursday. It fell as low as $1.2696 earlier, its lowest point since Sept. 10, 2010.

Italy is now paying over 7 percent to borrow for 10 years, a sign that investors are concerned the country could default on its debts. Many economists believe that those rates are unsustainable over the long term.

Greece, Portugal and Ireland were forced to seek a bailout after their borrowing rates rose above 7 percent.

The dollar rallied against most other currencies Friday.

The British pound fell to $1.5426 from $1.5483 late Thursday. The dollar rose to 0.9550 Swiss franc from 0.9533 Swiss franc and to 1.0266 Canadian dollar from 1.0192 Canadian dollar.

However, the dollar fell to 77.02 Japanese yen from 77.18 Japanese yen.