Investing.com - The dollar rose against most major currencies on Thursday after the Standard & Poor's ratings agency downgraded Spain, sending investors seeking safety in the dollar.
In Asian trading on Thursday, EUR/USD was down 0.33% at 1.2833.
Standard & Poor's said it lowered Spain's long-term credit rating to 'BBB-' from 'BBB+' and cut its short-term credit rating to 'A-3' from 'A-2'.
The ratings agency said Spain's deepening economic recession is limiting the Spanish government's policy options and added that rising unemployment and spending constraints are likely to fuel social discontent and contribute to friction between Spain's central and regional governments.
"In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," Standard & Poor's said in a statement.
The news sparked demand for the dollar, which sent higher-yielding currencies dipping in the Asian session.
Meanwhile, IMF statements pointing to the European debt crisis as the global economy's strongest headwind fueled a risk-off trading session that sent the dollar up.
Monetary stimulus programs underway at the Federal Reserve have already been priced in and are no longer weakening the dollar as much as in previous sessions.
The U.S. Federal Reserve is currently running a third round of quantitative easing, a monetary stimulus tool that sees the U.S. central bank buy USD40 billion in mortgage-backed securities a month on an open-ended basis to spur recovery.
Such policy tools weaken the greenback.
Japanese data pushed the greenback up as well.
Japan's Economic and Social Research Institute reported earlier that Japan’s core machinery orders fell 3.3% in August after rising 4.6% in July.
Analysts had expected the country's core machinery orders to fall 2.5% in August.
The dollar dipped against its Australian counterpart.
The number of employed people in Australia rose by 14,500 last month, the most since May, the Australian Bureau of Statistics reported, well above analysts' forecasts for 3,800 new jobs.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.06% at 1.5996.
The dollar was down against the yen, with USD/JPY trading down 0.14% at 78.08 and up against the Swiss franc, with USD/CHF trading up 0.22% at 0.9410.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.11% at 0.9829, AUD/USD up 0.17% at 1.0252 and NZD/USD trading down 0.02% at 0.8162.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.32% at 80.25.
In Asian trading on Thursday, EUR/USD was down 0.33% at 1.2833.
Standard & Poor's said it lowered Spain's long-term credit rating to 'BBB-' from 'BBB+' and cut its short-term credit rating to 'A-3' from 'A-2'.
The ratings agency said Spain's deepening economic recession is limiting the Spanish government's policy options and added that rising unemployment and spending constraints are likely to fuel social discontent and contribute to friction between Spain's central and regional governments.
"In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," Standard & Poor's said in a statement.
The news sparked demand for the dollar, which sent higher-yielding currencies dipping in the Asian session.
Meanwhile, IMF statements pointing to the European debt crisis as the global economy's strongest headwind fueled a risk-off trading session that sent the dollar up.
Monetary stimulus programs underway at the Federal Reserve have already been priced in and are no longer weakening the dollar as much as in previous sessions.
The U.S. Federal Reserve is currently running a third round of quantitative easing, a monetary stimulus tool that sees the U.S. central bank buy USD40 billion in mortgage-backed securities a month on an open-ended basis to spur recovery.
Such policy tools weaken the greenback.
Japanese data pushed the greenback up as well.
Japan's Economic and Social Research Institute reported earlier that Japan’s core machinery orders fell 3.3% in August after rising 4.6% in July.
Analysts had expected the country's core machinery orders to fall 2.5% in August.
The dollar dipped against its Australian counterpart.
The number of employed people in Australia rose by 14,500 last month, the most since May, the Australian Bureau of Statistics reported, well above analysts' forecasts for 3,800 new jobs.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.06% at 1.5996.
The dollar was down against the yen, with USD/JPY trading down 0.14% at 78.08 and up against the Swiss franc, with USD/CHF trading up 0.22% at 0.9410.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.11% at 0.9829, AUD/USD up 0.17% at 1.0252 and NZD/USD trading down 0.02% at 0.8162.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.32% at 80.25.