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Originally published Tuesday, September 7, 2010 at 2:15 PM

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Dollar hits 15-year low vs yen, jumps vs euro

The dollar hit a fresh 15-year low versus the yen Tuesday, but jumped versus the euro and other currencies as concerns about the stability of European banks resurfaced.

The Associated Press


The dollar hit a fresh 15-year low versus the yen Tuesday, but jumped versus the euro and other currencies as concerns about the stability of European banks resurfaced.

Worries about banks' exposure to the debt of European countries with stagnating economies triggered a search for safety. The Japanese yen and Swiss franc have been the prime beneficiaries of investors hoping to safely park their money this summer.

The dollar tumbled to 83.79 Japanese yen from 84.20 yen late Monday. Earlier in the session, it hit a 15-year low 83.52 yen. The dollar broke below 84 yen last month for the first time since June 1995.

Japan's central bank, which met Monday, did not take further action to stem the rise in the yen. A strengthening yen undercuts the country's exporters.

The U.S. currency also slid to 1.0096 Swiss francs from 1.0127 Swiss francs, hovering just above its low for the year of 1.0066 Swiss francs hit last week.

The dollar gained versus most other heavily traded currencies across the world, however, as news reports raised worries about the health of European banks.

A story in The Wall Street Journal questioned the rigor of the "stress tests" European regulators carried out on European banks earlier this year. Those tests had seemed to assure investors about the health of European banks, but new articles raised concerns that the banks may have more risky government debt on their books than had been estimated.

Meanwhile, the Financial Times said Germany's 10 biggest banks could have to raise as much as $135 billion to comply with new global banking standards.

Worries about countries such as Greece defaulting on their debts and the repercussions for the European banking sector helped drag the euro to a 4-year low against the dollar earlier this year and weighed on stock markets worldwide.

The euro, which had fallen below $1.19 by early June, had rebounded this summer as investor concerns shifted to slowing growth in the U.S. The euro, used by 16 European countries, slid to $1.2702 in late trading Tuesday from $1.2877 late Monday. It also hit a record low versus the Swiss franc.

In other trading Tuesday, the British pound fell to $1.5344 from $1.5399, while the dollar jumped to 1.0473 Canadian dollars from 1.0354 Canadian dollars. The dollar also rose against currencies of developing economies in Latin America and Asia, as well as the Scandinavian currencies and the Australian and New Zealand dollars.

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