USD strengthens versus euro

The US dollar stood at $1.4819 to the euro in early afternoon trade in New York on Tuesday, gaining on the shared currency as many traders felt that the euro has become overvalued.

In addition the euro traded at €1.3938 to the pound while it took ¥160.9545 to buy a euro.

Meanwhile, the European Union announced that Cyprus and Malta will become the fourteenth and fifteenth nations to join the euro on 1 January after an assessment showed that all preparations had been completed ahead of the changeover.

In Cyprus the euro will replace the Cypriot pound, while in Malta it will take the place of the Maltese lira.

The yen weakened after investors became more willing to make risky investments, encouraged by an announcement by Abu Dhabi that it will buy a stake in Citigroup (NYSE: C) that will put $7.5 billion in cash into the bank to help it recover from losses related to the subprime crisis.

In early afternoon trade in New York, the yen traded at ¥108.6100 in relation to the US dollar, while it was at ¥224.3415 to the pound and at ¥95.0989 to the Australian dollar.

The Swiss franc also weakened as investors returned to risk.

It took SFr1.1062 to buy one US dollar while the Swiss currency traded at SFr1.6393 to the euro, at SFr2.22848 to the pound and at SFr0.9685 to the Australian dollar.

Story link: USD strengthens versus euro