Dollar rises vs euro on Europe banking concerns; gives back some gains to other currencies

Dollar rises vs euro on Europe banking concerns

NEW YORK — The dollar rose against the euro Tuesday as investors worried about the stability of the continent’s banks.

But the U.S. currency slipped against other currencies in morning trading in New York compared to late Monday. It was still higher than its low for the week early on Monday as expectations slid for an immediate boost to the global economy from China’s yuan move.

Over the weekend, China had pledged greater flexibility in its exchange rates. Initial hopes that a stronger yuan versus the dollar would quickly bolster global trade propelled currencies from countries that export commodities and encouraged riskier bets from traders.

That sentiment faded late Monday, with analysts saying that the impact on global trade would likely be gradual. And uncertainty about the global recovery continued. A downgrade of one of Europe’s largest banks renewed concerns about how mounting public debt might affect bank balance sheets.

Markets are also looking ahead to any announcements that will come out of this weekend’s summit of the Group of 20 leading economies and the U.S. Federal Reserve’s decision on interest rates, expected Wednesday.

On Tuesday morning in New York, the euro fell to $1.2275 from $1.2324 late Monday.

But the British pound rose to $1.4791 from $1.4762 after Britain’s Treasury head announced a budget that would cut the country’s debt. The dollar fell to 1.1078 Swiss francs from 1.1114 francs and to 90.61 Japanese yen from 90.99 yen.

In other trading, the dollar slipped to 1.0220 Canadian dollars from 1.0231 Canadian dollars. It was flat against the Australian and New Zealand dollars. All three, which are big commodity exporters, were off their high point on Monday. They tend to rise in value when confidence in the economic recovery grows. An economy producing more goods would use more commodities such as oil, gas and metals.