Monday, October 17, 2011

Dollar falls on expectations of European debt plan (AP)

NEW YORK ? The dollar fell against the euro and most other currencies Friday on expectations that European leaders are closer to announcing a sweeping plan to help address the region's debt crisis.

Earlier this week German Chancellor Angela Merkel and French President Nicolas Sarkozy said a plan would be put together by the end of the month. They said it would include ensuring that European banks have enough capital.

A comprehensive plan now seems more likely to investors after all 17 countries that use the euro agreed to an expansion of the European bailout fund. Slovakia became the final nation to approve it on Thursday.

Currency investors shook off a downgrade of Spain's debt by ratings agency Standard & Poor's. The firm lowered its long-term rating on Spain's debt late Thursday to "AA-" from "AA" and said the outlook on the rating is "negative," meaning it could be lowered again.

In late trading Friday, the euro rose to $1.3875 from $1.3783 late Thursday. The British pound rose to $1.5815 from $1.5769.

The U.S. dollar fell despite a stronger-than-expected report on U.S. consumer spending last month. The Commerce Department said that retail sales rose 1.1 percent in September, as Americans spent more on autos, clothing and furniture. It was the largest gain in seven months.

In other currency trading Friday, the dollar fell to 0.8930 Swiss franc from 0.8977 Swiss franc and to 1.0117 Canadian dollars from 1.0190 Canadian dollars. The dollar rose to 77.22 Japanese yen from 76.88 yen late Thursday.

The dollar fell against most other major currencies, including the Australian, New Zealand and Hong Kong dollars, the Norwegian krone and the Brazilian real.

Source: http://us.rd.yahoo.com/dailynews/rss/europe/*http%3A//news.yahoo.com/s/ap/20111014/ap_on_bi_ge/us_dollar

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