Dollar rises as euro slumps

08:12, November 17, 2010      

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The U.S. dollar kept on rising against major currencies in late New York trading on Tuesday as the euro was dragged down further by sovereign debt worries.

The debt problem in Ireland was deepening and becoming a " survival crisis" for the euro zone and the wider European Union, according to Herman Van Rompuy, the European Council's president.

The euro hit 1.3495 against the dollar in Tuesday's trading session, the lowest level since Sept. 28, as investors were losing faith on the euro.

The U.S Labor Department announced on Tuesday that the core producer price index in October, which excludes food and energy costs, fell 0.6 percent -- the biggest drop since July 2006 -- after edging up 0.1 percent in September.

The lower-than-expected data somewhat reflected the deflation economy which the Fed concerned about, was taking shape, and the new round of quantitative easing policy seemed to be necessary.

Although the dollar continued its upward momentum, mostly attributed to European debt problem, against major currencies these days, some analysts believed the dollar would still remain weak in the coming months as the Fed's new quantitative easing policy started to take effect.

In late Tuesday trading, the dollar bought 83.28 Japanese yen, compared with 83.04 late Monday, and the euro fell to 1.3490 dollars from 1.3599.

The British pound fell to 1.5879 dollars from 1.6065. The dollar rose from 0.9848 to 0.9959 against Swiss francs, and also rose to 1.0216 Canadian dollars from 1.0074.

Source: Xinhua


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