Italy fears lift dollar, hurt euro

NEW YORK (AFP) - The dollar rose against the euro late Friday as unexpected signs of weakness emerged in Italy, shaking confidence in the eurozone and compounding worries about the Greek debt crisis. The dollar was trading for $1.4195 to the euro at 1800 GMT in New York on Friday, compared to $1.4257 at 2100 GMT on Thursday. The US greenback fell against the Japanese unit, dropping to 80.34 yen from 80.52 on Thursday. Europe's single currency was shaken after Italian banking stocks plunged on rumors of an imminent downgrade of Italy's sovereign rating, which also caused yields on Italian government debt to surge. "Based upon the Italian-German 10 year bond yield spread, which has widened to a record level, it certainly appears that investors are growing more concerned about this possibility turning into a reality," said Kathy Lien, a forex analyst with GFT, referring to the possibility of a downgrade. The dollar was helped by the release of a monthly US government report indicating that manufactured durable goods orders rose 1.9 percent in May after falling 2.7 percent the previous month, Lien said. The dollar fell against the Swiss franc, trading at 0.8367 francs at 1800 GMT on Friday, down from 0.8383 on Thursday. It gained against the British pound, strengthening to $1.5989 from $1.6010 on Thursday.

ePaper - Nawaiwaqt