NEW YORK — The euro fell to a 17-month low against the dollar on news that Standard & Poor's would strip France of its top-notch triple-A credit rating.
A French finance minister said Friday that the ratings agency downgraded the country’s credit rating by one notch. News reports also said that Austria’s triple-A credit rating may also be downgraded Friday.
The euro fell to $1.2670 late Friday, from $1.2827 late Thursday. It fell as low as $1.2623 earlier, its lowest level since Aug. 25, 2010.
A lower credit rating by France could hamper Europe’s efforts to resolve its debt crisis. A lowered credit rating means it could cost more to fund bailouts of heavily indebted countries like Greece.
The downgrade "would exacerbate the European sovereign debt crisis because it would be a strong sign that the crisis is spreading," GFT’s Director of Currency Research Kathy Lien wrote in a note to clients.
The dollar rallied against most other major currencies. The British pound fell to $1.5304 from $1.5342. The dollar rose to 76.96 Japanese yen from 76.76, to 0.9537 Swiss franc from 0.9438 and to 1.0237 Canadian dollar from 1.0189.
