Dollar falls to 2009 lows against euro
The greenback slides further as Wall Street holds previous day's gains. Geithner, who is visiting China, comments on deficit.
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| Click on the chart to see other currency prices. |
NEW YORK (CNNMoney.com) -- The dollar fell to fresh 2009 lows against the 16-nation euro on Tuesday, but the greenback was mixed against other major currencies.
The euro cost $1.4322, up 1.2% from $1.4160 late in the day Monday. The euro has been steadily climbing against the dollar since mid-March.
The dollar bought ¥95.76, down 0.8% from late Monday, when the dollar bought ¥96.55.
The greenback also fell against the British pound. The sterling cost $1.6588, up 0.9% from $1.6445.
The dollar has been weakening as investors bet that a recovery is underway. In times of uncertainty, investors shuffle funds into the greenback for safety; when the the economy is stronger, investors head for riskier, higher-yielding currencies.
The Japanese yen is also considered a safe-haven currency, where investors hide funds in times of instability. Selling of the Japanese yen is then another sign that investors see recovery.
Wall Street churned Tuesday, holding gains from a triple-digit surge in the previous session. The Dow Jones industrial average jumped 221 points on Monday, or 2.6%, to close at 8,721.44 points. That finish was closing in on the year's break-even point, and on Tuesday the Dow reached above it in morning trading.
The markets reacted favorably to a positive housing report released on Tuesday. The number of home sales contracts signed in April climbed for the third month in a row, according to the National Association of Realtors.
"Unfortunately the stronger housing market report will not stop investors from bailing out of U.S. dollars," said Kathy Lien, director of currency research for Global Forex Trading, in a research note.
"The only thing that can stop the decline in the dollar at this point are official comments from central bankers."
Treasury Secretary Timothy Geithner was in China for a meeting with top leaders, and their conversations centered around the role of the dollar.
The Treasury Secretary said in a speech Monday at Peking University that the current deficit-spending campaign in the U.S. is only temporary. China has questioned the creditworthiness of the U.S. in light of these massive spending initiatives. 
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