Euro weakens vs dollar after French election

AP News
Posted: May 07, 2012 4:08 PM
Euro weakens vs dollar after French election

The euro mostly recovered from a three-month low against the dollar Monday after voters in France and Greece threw out incumbent leaders.

Traders are worried about how a new president in France will affect Europe's current plans to solve its debt crisis. Europe had pushed through budget cuts, but the election results in France this weekend proved that voters are against them.

Socialist Francois Hollande, who will replace French President Nicolas Sarkozy, is in favor of economic stimulus to promote growth instead of just budget cutting.

Separate elections in Greece also highlighted frustration with austerity measures. Greek voters punished politicians who had backed cost-cutting plans, leaving the country without clear leadership.

The euro fell to $1.3050 late Monday from $1.3089 late Friday. The euro fell as low as $1.296 overnight, its lowest point against the dollar since Jan. 25.

In other trading, the British pound rose to $1.6184 from $1.6147. The dollar rose to 79.94 Japanese yen from 79.87 yen and to 0.9205 Swiss franc from 0.9177 Swiss franc.

The dollar fell to 99.32 Swiss franc from 0.9177 Swiss franc.