Dollar Stuck Near $1.31 Versus Stubborn Euro



The dollar was stuck in limbo versus the euro Tuesdays morning in New York, amid reports that Greece has agreed to lay off 15,000 public-sector workers by the end of the year.
Greece sold more debt than it targeted at an auction on Tuesday and at lower cost, even as talks regarding a write down of the country's debt continue.
Athens will need another influx of cash to avoid defaulting on its sovereign debt, but the terms of further aid are deeply unpopular among the Greek working class.
Despite signs that the euro zone may fracture, the dollar was unable to rally versus the euro, staying near $1.31. There was little movement near $1.58 versus the sterling, but the dollar hit a 2-week high of Y76.85 versus the yen.
German industrial production declined unexpectedly in December, data from the Federal Ministry of Economy and Technology revealed Tuesday.
Production dipped 2.9 percent from November, when it remained flat. Economists were expecting it to show nil growth as seen in the prior month.
In a sign that the world's fastest growing economies are feeling the pinch from Europe, the Indian government estimates the economy to grow at its weakest pace in three years during the financial year ending March 2012.
The Chinese economy will experience nearly 4 percentage points reduction in its growth rate projected for this year if the debt crisis in Europe intensifies, the International Monetary Fund (IMF) said on Monday.
In a report published in Beijing, the Washington-based lender warned that the risks to China from Europe are both "large and tangible." The Chinese growth rate is forecast to drop abruptly if the Euro area experiences a sharp recession.
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