Euro Erases Advance Versus Dollar After S&P Lowers Greece’s Credit Rating

The euro erased its gain versus the dollar and fell below $1.43 for the first time in more than two weeks as Standard & Poor’s reduction in Greece’s credit rating renewed concern the region’s debt crisis is worsening.

The 17-nation currency rose earlier as a report showed exports in Germany, Europe’s largest economy, jumped in March, bolstering the case for higher interest rates in the euro region. The pound depreciated after the Confederation of British Industry lowered its economic growth predictions and a report showed house prices unexpectedly fell.

“The S&P downgrade is just rubbing salt in a wound and confirmed everyone’s suspicions that Greece is essentially in a quasi default state,” said Boris Schlossberg, director of research at the online currency trader GFT Forex in New York. “You are still seeing some relatively good data out of the euro zone, so we are living in a bifurcated world.”

The euro decreased 0.2 percent to $1.4290 at 10:13 a.m. in New York, compared with $1.4316 on May 6, after touching $1.4273, the lowest level since April 19. The currency earlier rose 0.9 percent to $1.4442. The euro traded at 115.33 yen, compared with 115.44, after earlier rising 0.9 percent to 116.48. The dollar fetched 80.71 yen, compared with 80.63.

Futures traders increased their bets that the euro will gain against the U.S. dollar as of May 3, figures from the Washington-based Commodity Futures Trading Commission show. Net longs increased to 99,516 last week, the most since 2007, compared with 68,279 a week earlier.