France being put on notice that a credit ratings agency is closely watching it drove the U.S. dollar higher in value against the shared currency of the European Union on Tuesday, according to published reports.
As the euro zone's second-strongest economy, France's public finance system – which holds an unblemished AAA rating – is prone to endure high tension produced by the global financial crisis, according to Moody's Investors Service, as cited by Bloomberg. Germany holds the region's top economy.
"Europe's problems are going to take years to resolve, one meeting is not going to fix it," currency strategist Joseph Capurso with Commonwealth Bank of Australia in Sydney told Bloomberg. "Reality is setting in this week, and that's going to see euro long positions being cut."
News of slowing growth in China also reduced the strength of the euro while causing skepticism about the ability of leaders in the euro zone to control damages caused by the sovereign debt scourge.
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