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Dollar rangebound ahead of euro zone fin min meeting

Published 11/12/2012, 08:34 AM
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Investing.com - The U.S. dollar was trading in tight ranges against the other major currencies on Monday, ahead of a meeting of euro zone finance ministers in Brussels to discuss whether to release Greece’s next tranche of financial aid.

During European afternoon trade, the dollar eased back from a two-month high against the euro, with EUR/USD easing up 0.13% to 1.2726.

The euro found support after Greece’s government approved a budget of spending cuts and tax increases for 2013 late Sunday, just days after the parliament narrowly approved a EUR13.5 billion austerity package required to secure the country’s next installment of financial aid.

The eurogroup of finance ministers was to hold talks in Brussels later Monday, but no decision was expected to be taken ahead of an economic progress report from the troika.

Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.

Meanwhile, ongoing concerns over the U.S. fiscal cliff continued to underpin demand for the greenback.

The greenback was trading close to a two-month low against the pound, with GBP/USD slipping 0.15% to 1.5872.

Elsewhere, the greenback edged lower against the yen and the Swiss franc, with USD/JPY losing 0.12% to trade at 79.37 and USD/CHF inching down 0.09% to 0.9475.

The dollar was little changed against the yen earlier in the session after official data showed that Japan’s economy contracted by 3.5% in the third quarter compared to a year earlier as exports, consumption and business investment tumbled.

The report was offset by official data from China over the weekend showing that exports increased by 11.6% from a year earlier in October, while the trade surplus widened to the largest in almost four years.

The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.20% to 0.9994, AUD/USD rising 0.50% to 1.0436 and NZD/USD up 0.29% to 0.8168.

In Australia, official data showed that home loan demand rose less-than-expected in September, increasing 0.9% slightly below expectations for a 1.0% rise.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched down 0.08% to 81.07.

Later Monday, German Chancellor Angela Merkel was to travel to Lisbon to hold talks with Portuguese political leaders, amid public opposition to the country’s austerity cuts.




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