NEW YORK (AP) — The U.S. dollar fell to the euro in late trading Tuesday after China announced that it would raise rates. Investors have also become less worried about the unrest in Egypt, moving away from the dollar and looking to invest in riskier currencies.
China's central bank said Tuesday that it would raise deposit and lending interest rates by a quarter percentage point, the second time China has raised rates in over a month.
"It was expected, but the timing was unknown," said Camilla Sutton, chief currency strategist at Scotia Capital. "Investors are anticipating more interest rate hikes out of China."
The euro rose to $1.3627 late Tuesday, from $1.3591 Monday. The U.S. dollar had been gaining against the euro since late January when protests erupted on the streets of Egypt and investors were looking to invest in safe havens, such as the U.S. dollar. But investor concerns about Egypt have eased somewhat, analysts said, pushing riskier currencies higher against the dollar Tuesday.
"The situation in Egypt appears calmer," said Joseph Trevisani, the chief market analyst at FXSolutions. "The protests haven't gone away but there seems to be less intent to confront."
The U.S. dollar was also lower against most Asian and Latin American currencies Tuesday. In other trading Tuesday, the British pound fell to $1.6057 from $1.6121. The U.S. dollar rose to 0.9634 Swiss franc from 0.9552 Swiss franc, and also rose to 99.60 Canadian cents from 99.03 Canadian cents.
The U.S. currency also rose to 82.38 Japanese yen Tuesday from 82.29 Japanese yen Monday.
Source: Bloomberg By The Associated Press
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