Fitch Ratings says deal reached by eurozone leaders to reduce Greece's debt amounts to a default for the country

Cindy Allen

NEW YORK , October 28, 2011 (Associated Press) – The euro fell against the dollar Friday after Fitch ratings agency said the deal reached by European leaders to cut Greece's debt load would constitute a default for the country.

The plan asks Greece's private creditors to take losses of 50 percent on their holdings of the country's bonds, which is meant to lower Greece's debt burden.

Fitch said that despite the deal, Greece would still have a large amount of outstanding debt and that the country's growth prospects remain weak. The ratings agency said the deal would constitute a default for Greece.

In afternoon trading Friday, the euro fell to $1.4158 from $1.4216. On Thursday, the euro hit a seven-week high of $1.4246 after European leaders announced that they had reached a deal to contain the region's debt crisis.

"After yesterday's stunning rally, the holes in the Eurozone debt rescue deal are starting to attract attention," said Kathleen Brooks, research director at FOREX.com. Investors are starting to realize that it will take a lot more work for European leaders to pass the latest debt deal.

In other trading, the British pound rose to $1.6130 from $1.6121. The dollar fell to 75.72 Japanese yen from 75.94 yen, hovering near the all the time low of 75.63 yen it hit yesterday. But the dollar rose to 0.8624 Swiss franc from 0.8593 Swiss franc and to 99.34 Canadian cents from 99.07 Canadian cents.

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