Dollar falls; it's the euro's day

AP News
|
Posted: Jun 29, 2012 4:17 PM
Dollar falls; it's the euro's day

For once, the euro had a good day.

The dollar lost value against the euro and other major currencies Friday. U.S. stocks soared, but the dollar fell as other currencies benefited the most from progress in Europe, where leaders hammered out more plans on how to rescue debt-hobbled countries there.

The euro jumped 1.8 percent to $1.2660 on Friday from $1.2429 late Thursday. It was the biggest one-day gain since October, according to Kathy Lien at BK Asset Management. It was also a reversal from most of the week, when the euro had fallen steadily.

The dollar also fell against the British pound, the Swiss franc and the Canadian dollar.

The British pound was up about 1.1 percent to $1.5683 from $1.5499.

The dollar fell to 0.9490 Swiss franc from 0.9664 Swiss franc. It fell to 1.0174 Canadian dollar from 1.0353 Canadian dollar.

The exception was the Japanese yen, against which the dollar gained value, rising to 79.85 yen from 79.45 yen. Like the dollar, the yen is a safe-haven currency that investors buy when they are nervous about the economy.

European leaders announced Friday that they had agreed on plans make it easier for troubled banks there to get government bailout loans. They also plan to create a single regulator to oversee banks, which are currently overseen by regulators in different countries.

Investors' expectations for the summit had been low, largely because many previous summits have failed to produce much in the way of concrete results. Stocks had plummeted on Thursday before soaring Friday.

Some investors cautioned that the jubilance could fade quickly. European countries still have to work out how they can actually implement the plans, and some worry that the pool of rescue funds won't be big enough.