The euro rose against the dollar Monday as investors came to view a proposed U.S. bailout of the financial sector as having negative effects on U.S. taxpayers and their economy.
The 15-nation euro rose to US$1.4522 in morning European trading, from the US$1.4470 in late New York trading Friday.
Global markets had rallied Friday on news Washington was likely to announce a US$700 billion bailout plan, calming investors worried that losses from bad bets on mortgages could bring about the collapse of more companies, straining an already weakened financial system and global economy.
While the proposed bailout lifted sentiment for the time being, there were still a number of uncertainties about the plan and the general health of financial firms that could further unsettle markets in the coming days.
"Fed plans to bail out the troubled U.S. financial system have been largely dollar negative with many traders seemingly buying into the core idea that anything that's good for the banks will be bad for taxpayers," said James Hughes, a currency analyst at CMC Markets.
The dollar was flat against the British pound Monday morning at US$1.8355, while the dollar bought 106.36 Japanese yen, down from the 107.01 yen Friday night in New York.
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