Dollar rises to 3-week high against euro

AP News
Posted: Apr 05, 2012 3:38 PM
Dollar rises to 3-week high against euro

Growing fears about Europe's debt crisis pushed the dollar to a three-week high against the euro Thursday. The euro also fell against the Swiss franc, dropping below a ceiling set by the Swiss National Bank last year.

The yield on Spain's benchmark 10-year bond jumped to 5.74 percent Thursday, its highest point since November. A month ago, the rate was below 4.9 percent. Rising yields are a sign that investors are less confident in the country's finances.

The higher the yield on a country's bonds, the more expensive it becomes to borrow money. Greece, Portugal and Ireland needed to seek relief from their lenders after their borrowing rates rose above 7 percent.

Concerns about Spain's finances rose this week after weak demand at its bond auction Wednesday.

The euro fell to $1.3060 in late trading Thursday from $1.3139 late Wednesday. The euro fell as low as $1.3034, its lowest point since March 15.

The Swiss franc rose against the euro, briefly rising above the 1.20 level that the Swiss National Bank capped it at in September. The Swiss franc is considered a safe-haven currency and tends to rise when traders are worried about the global economy. Last year, the Swiss franc rose so much that the SNB said it would spend whatever it would take to stop the euro from falling below 1.20 francs. On Thursday, it fell to 1.1993 francs before quickly recovering.

The SNB wants to limit the franc's strength to protect Swiss companies. Last year, exporters were hurt as the value of the franc increased. A strong franc hurts exporters by making their goods more expensive for foreign buyers.

In other trading, the dollar rose to 0.9201 Swiss franc from 0.9161 Swiss franc. The British pound fell to $1.5828 from $1.5889.

The dollar fell to 82.36 Japanese yen from 82.58 yen and to 99.38 Canadian cents from 99.64 Canadian cents.