Euro falls near 4-month low on Greek fears

AP News
Posted: May 14, 2012 3:44 PM
Euro falls near 4-month low on Greek fears

Greece's failure to create a new government pushed the euro to a nearly four-month low against the dollar Monday.

The euro fell to $1.2847 in late trading from $1.2925 late Friday. Earlier, the euro fell to $1.2824, its lowest point since Jan. 18.

Greek politicians have been unable to form a coalition government since voters gave support to anti-austerity parties in elections May 6. Traders are worried that the country could drop out of the euro currency union if it doesn't follow through on its cost-cutting plans.

Meanwhile, Spain's 10-year borrowing rate soared above 6 percent Monday, a sign that investors are concerned about the country's finances. Greece, Ireland and Portugal were forced to ask for bailouts after their borrowing rates rose above 7 percent. A borrowing rate that high is considered too expensive for a country to maintain. Traders are worried that Spain, a much larger economy, may need a bailout too.

In other trading Monday, the British pound rose to $1.6105 from $1.6074. The dollar rose to 0.9351 Swiss franc from 0.9294 Swiss franc and to 1.0027 Canadian dollar from 0.9999 Canadian dollar.

The dollar fell to 79.86 Japanese yen from 79.90 yen.