NEW YORK: The dollar fell against the euro and other major currencies on Thursday, as traders brushed off bad news from the eurozone and shunned the safe-haven greenback. The euro rose by almost a cent against the dollar, to $1.4176 by 2145 GMT from $1.4083 in New York late Wednesday. Traders seemed to have already taken on board the fall of the Portuguese government and the increasing likelihood Lisbon will need a debt rescue from the European Union and the International Monetary Fund, like Greece and Ireland last year. According to David Song, a currency analyst with DailyFX, "hawkish comments from the European Central Bank helped to prop up the single-currency on Thursday."
"ECB board member Erkki Liikanen said inflation in the euro-area 'may rise faster than expected' on the back of rising food and energy prices," noted Song. That raised expectations of a rise in interest rates, which would make the euro more attractive to investors. Meanwhile the dollar was little changed at 81.01 yen after hitting 80.94 yen the day before.
"The US dollar traded lower against all of the major currencies except for the British pound which was hit hard by weaker-than-expected consumer spending data," said Kathy Lien of Global Forex Trading. The pound fell to $1.6119 from $1.6233 the day before. The dollar traded lower against the Swiss franc, at 0.9081 francs from 0.9084 francs the day before.
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