A successful Greek bond sale and disappointing start to the U.S. earnings season sent the dollar lower Tuesday against other major currencies. The 16-nation euro edged up to $1.3594 in morning trading in New York from $1.3589 late Monday. On Monday, the euro jumped to $1.3691, its highest point in a month, bolstered by a European pledge to make $40.5 billion in loans available to Greece this year if needed.
On Tuesday, Greece raised euro1.56 billion, or about $2.1 billion, in an oversubscribed bond auction although interest rates remained high. Greece is struggling with borrowing costs that remain far above those of Germany as investors still see risk of default. UBS analyst Manuel Oliveri said the bond auction was a good sign, and Greek borrowing costs will drop further as markets absorb the aid plan. That should propel the euro higher against the dollar in the near future, he said. Debt problems in Greece and other European countries have driven the euro from above $1.51 last November to below $1.33 just last week.
The dollar wasa also hurt after aluminum producer Alcoa Inc. on Monday posted first-quarter revenue that was less than analysts had expected. Alcoa is the first major U.S. company to report first-quarter results. Its performance may foreshadow outcomes for other major U.S. businesses expected to report over the next few weeks.