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CD: Dollar sinks to latest 2-month low against euro as traders believe European crisis is easing
 
NEW YORK (AP) - The dollar slid to a two-month low against the euro in morning trading Monday in New York amid a perception that the European debt crisis is easing and the European Central Bank could lift interest rates.

The euro, used by 17 European countries, jumped to $1.3667 from $1.3602 late Friday, hitting its highest point since late November.

The euro has jumped more than 5 percent in the past two weeks after a months-long decline spurred by the European debt crisis that has led to bailouts for Greece and Ireland. But investors' perception that European officials will soon come up with a more comprehensive solution to the crisis has helped calm tensions.

Moreover, ECB President Jean-Claude Trichet suggested in an interview published by The Wall Street Journal on Sunday that the central bank could lift interest rates to combat higher inflation despite the debt woes in Ireland, Greece, Portugal and Spain.

Higher rates can help support a currency, but they can also slow economic growth.

The euro got a further boost after the ECB said it spent far less buying up government bonds last week compared with the previous week when concerns about the debt situation were particularly acute.

The euro's recent momentum is helping pull traders on board despite continued concerns about slow growth and debt in many of the currency bloc's member nations, said David Gilmore of Foreign Exchange Analytics in Essex, Conn.

"Price does amazing things to people's perception," Gilmore said. "People forget about euro-zone debt problems and start looking for reasons they should own euros."

The dollar fell broadly Monday, dropping to 82.46 Japanese yen from 82.60 yen, 0.9470 Swiss franc from 0.9590 Swiss franc and 99.40 Canadian cents from 99.48 Canadian cents.

The British pound traded at $1.6001 from $1.6002 after a push higher in New York. It had earlier in the day bottomed as $1.5922.

The U.S. currency was also lower versus the Australian dollar, Brazilian real and the Nordic currencies.
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