Dollar mixed on upbeat home sales report, continued worries about European debt crisis

more images

more images

Dollar mixed on home sales, European debt crisis

NEW YORK — The dollar was mixed against major currencies Wednesday as investors weighed upbeat news on U.S. home sales with the impact of the debt crisis on some of Europe’s banks.

The euro held above the four-year low it hit on Tuesday, but slipped to $1.2238 in late New York trading from $1.2253 the previous afternoon.

Investors pushed up Spain’s borrowing costs on Wednesday, a key indication of how risky markets think Spain is. A debt downgrade from last week cast a shadow over the country’s efforts to avoid a Greek-style debt crisis.

Spain is struggling to crawl out of its own recession after the collapse of its construction sector, which had driven more than a decade of economic growth. The economy grew by 0.1 percent in the first quarter, after six quarters of decline.

The euro has dropped about 15 percent against the dollar this year as traders take a dimmer view of Europe’s prospects and the strangling effect of deep government spending cuts. Indebted European countries are cutting spending to get their budgets back in line with European Union mandates.

Europe’s debt woes are set to dominate talks at this week’s Group of 20 summit.

The National Association of Realtors posted a stronger-than-expected increase in pending home sales that restored some of investors’ optimism about the economy. The number of contracts on existing homes rose 6 percent in April.

In other late trading, the British pound fell to $1.4648 from $1.4713 late Tuesday. The dollar slipped to 91.18 yen from 91.24 yen after Yukio Hatoyama resigned as Japan’s prime minister. The move was meant to improve his party’s chances in an election next month.

The dollar slipped to 1.1558 Swiss francs from 1.1562 francs, and fell to 1.0396 Canadian dollars from 1.0505 Canadian dollars.