Dollar slides after European Union leaders agree to pledge financial support for Greece

Dollar slides as EU leaders resolve Greek bailout

NEW YORK — The dollar slid against the euro and the pound Friday after European leaders put aside their differences over the Greek debt crisis and agreed on a pledge of financial support for the country.

The 16-nation euro recovered from a 10-month low against the dollar, jumping to $1.3401 in late afternoon trading in New York from $1.3291 the previous day. Before the pledge of aid from European countries and International Monetary Fund late Thursday, the euro had fallen below $1.33 for the first time since May 2009, dipping as low as $1.3268.

Late last year, the euro traded above $1.51.

The British pound climbed to $1.4892 from $1.4822, while the dollar fell to 92.54 Japanese yen from 92.76 yen.

Debt crises in several European countries, particularly Greece, have driven the euro lower in recent months. Earlier this week, credit ratings agency Fitch Ratings also downgraded Portugal’s debt.

EU leaders and politicians have wrangled over the best way to help Greece. Germany, the largest economy in the EU, had said any loan plan should be a last resort and should include aid from the International Monetary Fund. Meanwhile, European Central Bank’s president Jean-Claude Trichet warned that Europe must take responsibility for its own financial problems.

The plan agreed to on Thursday would provide individual loans from other European countries and funding from the International Monetary Fund, in order to rescue Greece if the country found itself unable to borrow or pay its debts. It can be tapped only if Greece or other troubled countries that use the euro currency can’t raise funds from financial markets.

Michael Woolfolk, senior currency strategist at Bank of New York Mellon Corp., said Europe’s debt problems are far from over. Portugal and Ireland still face fiscal troubles which could push the euro down further.

The dollar “remains the preferred currency to hold for the time being, with the euro struggling under the weight of fiscal imprudence,” Woolfolk wrote in a note to clients.

In other late trading Friday, the dollar dropped to 1.0670 Swiss francs from 1.0735 francs, but edged up to 1.0285 Canadian dollars from 1.0228 Canadian dollars.