NEW YORK (AP) — The dollar climbed Monday as markets digested a bailout for Greece and economic reports showed broad improvements in the U.S. economy.
The euro fell to $1.3212 in late New York trading from $1.3308 late Friday.
European governments and the International Monetary Fund have committed to help Greece with 110 billion euros, or $145 billion, in emergency loans. The money is aimed at keeping Greece from defaulting on its debts and preventing its financial crisis from infecting other indebted countries as Europe struggles out of recession.
But concerns remain about the Greek government’s ability to implement the deep cuts in services and pensions while also making the tax increases needed to rein in the budget deficit. Other countries using the euro also continue to struggle with debt.
“Should large scale bailouts become necessary for countries other than Greece, this could have a serious negative impact on the euro,” said UBS analyst Beat Siegenthaler in a research note.
The euro, once seen as a viable alternative to the dollar as a reserve currency, has plunged this year from a level above $1.51 in November because of the deepening debt crises in several countries using the shared European currency.
Trading was thin Monday, with markets in the U.K., Japan and China closed for holidays. David Watt, senior currency strategist at RBC Capital in Toronto, cautioned that the low level of participants meant that the day’s movements might not reflect market sentiment.
In the U.S., the government said consumer spending increased 0.6 percent in March, the biggest gain in five months. A private trade group said the manufacturing sector grew last month at the fastest pace in nearly six years.
The improvements in the U.S. economy have been outpacing gains in Europe and Japan. The expectation that the Federal Reserve will have to raise interest rates before the European Central Bank, Bank of England and Bank of Japan has also helped boost the dollar versus the euro, pound and yen this year.
In other late trading Monday, the British pound slipped to $1.5258 from $1.5277. The dollar rose to 94.59 Japanese yen from 93.93 yen and climbed to 1.0846 Swiss francs from 1.0765 francs, but slipped to 1.0103 Canadian dollars from 1.0170 Canadian dollars.
