Dollar up vs euro as European borrowing costs rise (AP)

NEW YORK ? The dollar rose against the euro Tuesday as borrowing costs in Italy, Spain and France jumped, stoking fears that Europe's debt crisis may spread to other countries.

Higher borrowing costs are a sign that investors are worried that the country they are buying bonds from may have trouble paying its debts. Italy's 10-year bond jumped above 7 percent again Tuesday.

That level is important because Greece, Portugal and Ireland were forced to get financial lifelines after their rates rose above 7 percent. Unlike those countries, Italy's debt is considered too large to be bailed out by its European neighbors. Many economists think the higher borrowing costs are unsustainable.

The yields on 10-year bonds for Spain and France also rose Tuesday, although both are still below 7 percent. The increase is raising fears that more countries may be sucked into Europe's debt crisis.

The euro fell to $1.3542 in afternoon trading Tuesday from $1.3616 late Monday.

In other trading, the British pound fell to $1.5834 from $1.5898. The dollar rose to 0.9168 Swiss franc from 0.9076 Swiss franc and to 1.0215 Canadian dollar from 1.0174 Canadian dollar. It fell to 77.01 Japanese yen from 77.12 yen.

Source: http://us.rd.yahoo.com/dailynews/rss/europe/*http%3A//news.yahoo.com/s/ap/20111115/ap_on_bi_ge/us_dollar

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