Dollar slips on positive German economic data

NEW YORK: The dollar slipped against the euro Tuesday as German economic data encouraged confidence in the European currency.

But dealers said the Greek debt crisis, with increasing speculation about a possible default, appeared to be gaining momentum again, keeping the markets on edge.

At 2100 GMT the euro stood at $1.4100, compared to $1.4047 late Monday.

The euro found some support after Germany's closely tracked Ifo index showed that business sentiment steadied in May after two months of falls.

"The ability of the euro to bounce... is reassuring but the euro is unlikely to avoid (a) further bout of jitters near term," said analyst Jane Foley at Rabobank.

Kathy Lien at GFT said that "Although the problems are far from being resolved, Greece's front-loaded privatization plan has helped to stabilize the financial markets.

"As a result, the euro, British pound and commodity currencies are trading higher while the dollar is trading lower.

"Whether this relief rally will last is still up in the air," she added, citing political risks in Greece, Italy and other countries.

The dollar traded down to 81.91 yen from 81.96 a day earlier. It fell to 0.8801 Swiss Francs (0.8836). The British pound meanwhile bought $1.6174 ($1.6123).

Copyright AFP (Agence France-Presse), 2011