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Dollar Tumbles Against Euro on European Debt Deal
Oct 28,2011 09:05CST
industry news
Source:SMM
The dollar tumbled against the euro as European debt deal boosted investors' confidence in the bloc's shared currency.

NEW YORK, Oct. 28 (Xinhua) -- The dollar tumbled against the euro as European debt deal boosted investors' confidence in the bloc's shared currency.

Euro zone leaders struck a deal early Thursday after an eight- hour meeting, in which private banks and insurers agreed on a 50 percent write-down of Greek government debt and the policymakers decided to expand the bloc's financial rescue fund to 1 trillion euros and to recapitalize European banks.

The deal bolstered the market sentiment and pushed the euro much higher. The dollar index tumbled about 1.6 percent, driven by the strong euro.

To add to the optimism, the data showed U.S. gross domestic product grew at a 2.5 percent annual rate in the third quarter, nearly doubled compared to the previous three months.

Lifted by increasing risk appetite, stocks, metals and crude oil surged. The dollar, which is regarded as a risk-aversion investment, fell. In late Thursday trading, the euro soared to 1.4216 dollars from 1.3908.

The dollar bought 75.94 Japanese yen, lower than 76.2 from late Wednesday. The British pound rose to 1.6121 dollars from 1.5956. The dollar fell to 0.8593 Swiss franc from 0.8817, and dropped against the Canadian dollar to 0.9907 from 1.0006.

 

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