NEW YORK (AP) -- The euro is rising against the dollar after hitting a 16-month low in overnight trading.

German Chancellor Angela Merkel gave the euro a slight boost after saying that European leaders will have a new treaty with tougher fiscal rules by the end of this month or by early March. European leaders agreed last month to make new fiscal rules. Merkel made the comments after a meeting with French President Nicolas Sarkozy Monday.

The euro edged up to $1.2739 in midday trading from $1.2724 late Friday. The euro fell as low as $1.2676 overnight, its lowest point since September 2010.

In other trading, the British pound rose to $1.5439 from $1.5426. The dollar fell to 76.85 Japanese yen from 77.02 yen.

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