Portuguese bond sale eases concerns

The euro rose against the dollar Wednesday after Portugal successfully raised more than US$1.6 billion in a bond auction, helping assuage some fears that the country will soon need a bailout.

Investors worry that Portugal or even significantly larger countries such as Spain may be next in line for emergency aid from the European Union and International Monetary Fund following the rescues of Greece and Ireland last year. The ongoing debt crisis has prompted EU officials to propose increasing the €440 billion rescue fund.

In morning trading in New York, the euro rose to US$1.3029 from US$1.2970 late Tuesday. The euro has slid about 10 per cent since early November as investor fears intensified about government debt defaults and bailouts in Europe.

The dollar was mostly lower against other currencies around the world as stocks rose. Investors sometimes bet against the dollar, considered a "safe haven" currency, when they feel more confident about the health of the global economy.

Instead, they buy currencies of countries that have higher interest rates, which can generate bigger returns.

The British pound rose to US$1.5658 from US$1.5600, while the dollar rose to 83.35 Japanese yen from 83.27 yen. Against a group of six major currencies, however, the dollar fell 0.5 per cent.

In other trading, the dollar fell to 0.9709 Swiss franc from 0.9735 Swiss franc, and slid to 98.56 Canadian cents from 99.10 Canadian cents. It also slid against major Latin American currencies, the Australian dollar, the Scandinavian currencies and currencies in Asia's emerging markets.

- AP