US dollar falls against euro as EU tackles debt

The US dollar fell against the euro on Tuesday as European Union officials grappled with sovereign debt woes in Greece and other eurozone countries.

The euro was trading at $1.4234 around 2100 GMT, up from $1.4153 at the same time on Monday.

Against the Japanese currency, the dollar fetched 81.36 yen compared with 80.76 yen.

The European currency started the day rising against the dollar as EU finance ministers meeting in Brussels on Tuesday considered how to prevent Greece from defaulting on its loans.

Leading eurozone policy-maker Jean-Claude Juncker said that a "soft restructuring" of Greece's 330-billion-euro debt is a possibility as an EU-IMF mission in Athens was extended by one week.

On Monday, EU ministers approved a 78-billion bailout for debt-laden eurozone nation Portugal. 

The pound sterling remained strong, following the announcement that British inflation rose to 4.5 percent in April, the highest rate since September 2008.

The figure is likely to increase the calls for the Bank of England to raise interest rates to dampen inflation, despite the fragile economic recovery.

The pound rose to $1.6248 from $1.6186.

The dollar was under pressure after US data showed that housing construction plunged in April.

Housing starts tumbled 10.6 percent from March to a seasonally adjusted annual rate of 523,000, the Commerce Department reported.

Against the Swiss currency, the dollar fell to 0.8801 francs from 0.8843 late Monday.