Tags: Dollar | Rally | Fears | Greece

Dollar Continues to Rally on Fears About Greece

Wednesday, 16 May 2012 02:30 PM

Worries that Greece will drop out of the euro currency union continued to push the dollar higher against most other currencies Wednesday.

The dollar index, which compares the U.S. dollar against six other currencies, has rallied over 3 percent since April 30 as traders seek the safety of the U.S. currency on growing concerns about Greece.

During elections in early May, Greek voters gave support to anti-austerity parties. Since then, Greek politicians have failed to create a new government, forcing the country to hold a new election next month. Traders are worried that if those parties win in June the country may drop out of euro zone, which could hurt the euro's credibility.

With Greece's political future still uncertain, traders are more comfortable holding the dollar, says Geoffrey Yu, currency strategist at UBS in London. The dollar is considered a safer bet during times of international turmoil.

The euro fell to $1.2722 in afternoon trading from $1.2734 late Tuesday. Earlier, the euro fell to $1.268, a four-month low against the dollar.

The British pound fell to $1.5926 from $1.6003. The dollar rose to 80.40 Japanese yen from 80.27 Japanese yen and to 1.0070 Canadian dollar from 1.0047 Canadian dollar. 1.268

The dollar was unchanged at 80.27 Japanese yen.

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2012-30-16
Wednesday, 16 May 2012 02:30 PM
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