NEW YORK -- Reports that Russia has begun large-scale swaps of dollars for euros sent the European currency to new highs against the U.S. currency Wednesday.
While Moscow would not confirm the rumors, fears that they may be true were enough to push the euro up to $1.31, the BBC reported.
Besides speculation about what Russia's central bank was doing, the dollar also fell against the euro due to a widely held view that Washington wants a weak dollar to help shrink its massive trade imbalance and the huge federal budget deficit that can only be financed by the United States selling debt overseas.
Currency traders said they expect little overall change in market sentiment even if U.S. economic data due Wednesday is positive.
"The dollar doesn't care about short-term U.S. economic fundamentals," said Sean Callow, at IDEAglobal in New York.
