The dollar rose to a 6-1/2-month high against the euro on Friday and U.S. stocks fell as concerns about the fiscal health of several euro zone countries raised an aversion to risk among investors.
News that the U.S. economy grew at the fastest pace in more than six years in the fourth quarter also lifted the dollar, boosting views the United States was recovering. Data showing the U.S. economy grew at a 5.7 percent annual rate raised expectations the U.S. Federal Reserve could hike interest rates before the European Central Bank.
Investors also remained concerned about the fiscal health of Greece, Spain and Portugal, helping push the euro below $1.39 for the first time since early July. Many markets ended lower in January, which often proves to be a harbinger for the rest of the year. A slide in many markets last January belied that historical indicator after stocks and other assets rallied strongly for much of the year. U.S. stocks pulled back from early gains even as Greek and European Union officials said there was no chance of a Greek default or EU bailout.
Commodity markets, especially copper and oil, ended January with their worst losses in more than a year as the surging dollar and weak demand outlook caused prices to stumble after a strong run in 2009.
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