Euro sinks to 4-month low vs dollar on Greek fears

AP News
Posted: May 15, 2012 3:38 PM
Euro sinks to 4-month low vs dollar on Greek fears

The euro fell to a four-month low against the dollar Tuesday after Greek leaders failed to form a new government and said a new election will be held next month.

Greek politicians have been in a political deadlock since voters gave support to anti-austerity parties in elections May 6. Traders are worried that if those parties win in June the country could drop out of the euro currency union, which could weaken the euro's credibility.

The euro fell to $1.2734 in late trading Tuesday from $1.2847 late Monday. The euro fell as low as $1.2724 earlier, its lowest point against the dollar since Jan. 18.

Traders also bought the U.S. currency on better news about the U.S. economy. Confidence among U.S. builders rose to a five-year high in May. And a survey of manufacturing activity in New York rose in May.

The dollar strengthened against most other currencies Tuesday. The British pound fell to $1.6003 from $1.6105. The dollar rose to 80.27 Japanese yen from 79.86 yen, to 0.9432 Swiss franc from 0.9351 Swiss franc and to 1.0047 Canadian dollar from 1.0027 Canadian dollar.