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Forex - Dollar gains on JPMorgan loss, consumer sentiment

Published 05/11/2012, 03:07 PM
Updated 05/11/2012, 03:08 PM
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Investing.com - The dollar gained against other currencies on Friday in wake of a surprise USD2 billion trading loss at JPMorgan Chase as well as on the coattails of stronger-than-expected consumer sentiment figures out of the U.S.

The euro saw some demand on talk that more Greek political parties want to stay in the currency zone in U.S. trading on Friday although gains were short-lived, with EUR/USD down 0.09% and trading at 1.2925.

The dollar enjoyed support in the U.S., where consumer sentiment hit a 4-year high.

The Thomson Reuters/University of Michigan's preliminary May consumer sentiment index reading jumped to 77.8 from 76.4 in April, outpacing expectations for 76.2.

The dollar also posted gains on news that U.S. financial titan JPMorgan Chase reported a USD2 billion trading loss, which fueled some demand for the greenback among investors seeking safe harbor.

In Greece, the country still doesn't have a government in place although progress appeared to be underway in wake of an electoral stalemate.

Recent parliamentary elections left no one party able to construct a coalition government, which bruised the euro, although politicians still have some time to come to an agreement by next week to avoid a new round of elections.

Greek conservative leader Antonis Samaras said consensus is building that major political parties want to stick with the euro despite recent calls from leftist Alexis Tsipras, who declared the bailout deal null and void and called for a moratorium on debt payments.

Tsipras later tempered his comments, pointing out that abandoning the euro would be bad for Greece although he stood by his comments that austerity measures weren't helping the country.
 
Greece has agreed to harsh and politically unpopular austerity measures in exchange for bailout money from the European Commission, the European Central Bank and the International Monetary Fund.

In Asia, China's industrial output climbed 9.3% in April from a year earlier, according to official data, below forecasts for a 12% gain.

Meanwhile, Chinese retail sales rose 14.1%, below market expectations for 15.2% expansion.

The greenback, meanwhile, was down against the pound, with GBP/USD down 0.47% and trading at 1.6069.

The U.S. currency was down against the yen, with USD/JPY trading down 0.06% at 79.88, and up against the Swiss franc, with USD/CHF up 0.08% and trading at 0.9293.

The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.19% at 1.0002, AUD/USD down 0.53% at 1.0029 and NZD/USD down 0.13% at 0.7844.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% at 80.39.

Next week, the dollar will trade on U.S. inflation and retail sales data.






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