Euro falls to 23-month low on weak US data

AP News
Posted: May 31, 2012 4:08 PM
Euro falls to 23-month low on weak US data

The euro fell to a 23-month low against the dollar Thursday on weaker economic data from the U.S. and ongoing fears about Europe.

The euro fell to $1.2366 in late trading Thursday from $1.2382 late Wednesday. The euro fell as low as $1.2335 earlier, its lowest point against the dollar since July 1, 2010.

The Commerce Department said the U.S. economy grew at an annual rate of 1.9 percent in the first three months of the year, below its earlier estimate of 2.2 percent.

Weekly applications for unemployment aid rose 10,000 to 383,000, the Labor Department said.

Meanwhile, the head of the European Central Bank told European Union leaders that the 17-country euro currency union is unsustainable in its current form. He said they need to come up with a new vision to get out of the current financial crisis.

The euro has fallen nearly 7 percent in May as Europe's debt crisis intensified. The likelihood of Greece leaving the euro grew in early May when parties opposed to the terms of the country's financial rescue won at the polls. New elections are planned for next month.

Spain has become a focus of the crisis this week as its borrowing rates soared to nearly 7 percent, a level that considered unsustainable for a country to continue funding itself by selling bonds to investors. Greece, Portugal and Ireland were forced to ask for financial aid after their rates went over 7 percent.

The dollar was mixed against other currencies. The British pound fell to $1.5414 from $1.5490. The dollar rose to 0.9711 Swiss franc from 0.9699 Swiss franc.

The dollar fell to 78.33 Japanese yen from 79.07 yen and to 1.0329 Canadian dollar from 1.0293 Canadian dollar.