Dollar rises amid European concern, positive US data

NEW YORK, Nov 19 (Xinhua): The US dollar rose against most major currencies last week against the backdrop of the ongoing European debt crisis and upbeat economic data. The auction of Italian five-year government bonds Monday produced a yield of 6.29 per cent, a sharp rise from the 5.32 per cent last month. Also, some analysts noted that Spain's 10-year note yields topped 6 per cent for the first time since early August, suggesting the borrowing costs of Spain also rose due to concerns over the country's debt problems. The Spanish government Thursday sold 3.56 billion euros (US$4.8 billion) worth of 10-year bonds at an average yield of nearly 7 per cent, which is a level seen as unsustainable. The rising yields of government bonds worried investors as the European debt crisis seemed to be spreading in eurozone countries. The European Union, the European Central Bank, and the International Monetary Fund have approved an 8-billion-euro ($10.8-billion) installment for Portugal's bailout package, while Greek Prime Minister Lucas Papademos won a confidence vote which was crucial to implementing austerity measures. On the economic front, eurozone gross domestic product (GDP) expanded by 0.20 per cent in the third quarter, led by Germany and France. The GDP data eased investors' worries about an economic recession in the region. However, European Commission President Jose Manuel Barroso Wednesday said the eurozone faces a "systemic crisis" that calls for more action by euro-member states. Meanwhile, US economic data this week showed that the US economy might pick up momentum. The US Labor Department said Wednesday that consumer prices dropped 0.1 per cent during the month, the first decline in four months, as energy prices decreased.