U.S. Dollar Slips Against Euro
Monday January 24, 12:44 pm ET
U.S. Dollar Slips Against Euro After Report Shows World's Banks Stocking Up on European Currency
FRANKFURT, Germany (AP) -- The U.S. dollar slipped against the euro Monday after a report showed that the world's central banks are increasingly stocking up on euros.
The 12-nation euro was at $1.3045 in late European trading, up slightly from $1.3039 on Friday. The British pound was trading at $1.8779, down marginally from $1.8784 at the end of last week.
The dollar staged a minor rally last week following some positive news about the U.S. economy, pushing the euro below the $1.30 level. But it was not enough to calm persistent fears surrounding the ballooning U.S. trade and budget deficits.
European leaders worry that their currency's rise makes European products more expensive overseas and could threaten the continent's largely export-driven economic recovery. On Monday, French Finance Minister Herve Gaymard appealed to Washington to address concern over the deficits.
"The imbalances at the origin of the dollar's structural fall ... persist and everything must be done to remedy them," Gaymard said after meeting with his German counterpart, Hans Eichel.
The deficit worries have contributed to moves by two-thirds of the world's central banks to increase their euro reserves, according to a report released Monday by Central Banking Publications. "This gives more fuel in the fire to give euro bulls more comfort," Paul Mackel, currency strategist at ABN Amro in London, told Dow Jones Newswires. "Reserve managers look at the long-term picture and are incredibly important."
The European currency reached a record high of $1.3667 at the end of December, following a climb from about $1.20 in September.The dollar edged up against the Japanese yen in Monday trading, reaching 102.71 yen -- up from 102.67 yen late Friday.
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