Euro rises as Spain's borrowing costs fall

AP News
Posted: Apr 11, 2012 3:57 PM
Euro rises as Spain's borrowing costs fall

The euro rose against the dollar Wednesday as borrowing costs in Spain eased.

The dollar trimmed some of its losses against the euro after a Federal Reserve report made it seem less likely that the central bank will launch another round of bond-buying to help the economy.

The euro rose to $1.3099 in late trading Wednesday from $1.3076 late Tuesday.

A Federal Reserve survey of business conditions in the United States, called the Beige Book, found that hiring was stable or rose across the country.

The Fed has launched two rounds of bond purchases, most recently in August 2010, to lower long-term interest rates and make stocks more attractive to investors.

Lower interest rates can weigh on a currency by reducing the returns investors get from holding it. With a third round of bond-buying less likely, traders bought dollars.

In Europe, the yield on Spain's benchmark 10-year bond fell to 5.8 percent Wednesday after jumping above 5.9 percent Tuesday. In early March, the rate was below 4.9 percent.

Easing yields are a sign that investors are more confident in the country's finances.

In other trading Wednesday, the British pound rose to $1.5904 from $1.5858. The dollar fell to 0.9173 Swiss franc from 0.9190. It was unchanged at 1.0039 Canadian dollar.

The dollar rose to 80.92 Japanese yen from 80.79 yen.