Dollar rises vs. European currencies on Greek woes

The dollar rose as renewed jitters over Greece's debt crisis and the prospect of a faltering recovery in Europe drove investors to safer havens such as the U.S. currency and the Japanese yen.

Meanwhile, the Canadian dollar teetered near parity with the U.S. dollar. The Canadian "loonie" has been propelled higher by surging oil prices, Canada's relatively small budget deficit and an improving jobs outlook.

In late New York trading Wednesday, the 16-nation euro fell to $1.3373 from $1.3396 late Tuesday.

The euro dropped as Greece's borrowing costs shot up following a report, later strongly denied, that Athens wanted to revise a deal providing for a European and International Monetary Fund financial bailout.

IMF inspectors were due in Athens Wednesday to review progress in government austerity cuts.

Meanwhile, economic activity in the 16 countries using the euro was flat during the fourth quarter, according to EU statistics. In the U.S., on the other hand, the economy grew 5.6 percent in the last three months of 2009.

The quicker improvement in the U.S. means it is increasingly likely that the Federal Reserve will begin increasing interest rates before the European Central Bank.

Rising interest rates tend to bolster a currency as investors transfer funds in search of higher yields.

In other late trading, the dollar ticked up to 1.0039 Canadian dollars from 1.0001 Canadian dollars. The U.S. dollar was briefly worth less than the Canadian currency on Tuesday for the first time since July 2008, and hit a fresh 21-month low of 99.79 Canadian cents Wednesday.

The British pound slipped to $1.5272 from $1.5277, while the dollar rose to 1.0722 Swiss francs from 1.0693 francs. The U.S. currency fell to 93.23 Japanese yen from 93.87 yen.