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Dollar lower vs. rivals, focus on Greece debt swap

Published 03/08/2012, 04:29 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Thursday, as hopes that Greece’s private creditors will sign off on a debt swap deal later in the day supported demand for riskier assets.

During European morning trade, the dollar was lower against the euro, with EUR/USD adding 0.34% to hit 1.3195.

Prospects for a successful Greek deal rose after a group of major banks and funds said they would take part in the swap. As of late Wednesday, about 52% of the EUR206 billion bonds up for restructuring had been pledged.

A positive outcome should clear the way for a bailout package and help Greece avert a messy debt default.

The greenback was also lower against the pound, with GBP/USD rising 0.38% to hit 1.5801.

The greenback was higher against the yen but lower against the Swiss franc, with USD/JPY climbing 0.51% to hit 81.51 and USD/CHF slipping 0.33% to hit 0.9137.

The yen came under pressure earlier after data showed that Japan’s current account balance swung to a record deficit of JPY437.3 billion in January, while a separate report showed that the country’s gross domestic product declined 0.2% in the fourth quarter after a 0.6% fall the previous month.

Also Thursday, Bank of Japan Governor Masaaki Shirakawa signaled readiness to loosen monetary policy again if needed to support the economy.

In Switzerland, government data showed that consumer price inflation rose more-than-expected in February, ticking up 0.3% after a 0.4% decline the previous month.

Elsewhere, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD declining 0.28% to hit 0.9948, AUD/USD advancing 0.53% to hit 1.0639 and NZD/USD climbing 0.93% to hit 0.8238.

Earlier in the day, the Reserve Bank of New Zealand kept its benchmark interest rate unchanged at 2.50%, saying that the sustained strength of the New Zealand dollar would eliminate the need for rate increases in the coming months.

Meanwhile, official data showed that the number of employed people in Australia fell by 15,400 in February, disappointing expectations for a gain of 5,000 jobs, while the unemployment rate ticked up to 5.2% from 5.1% the previous month.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.20% to hit 79.56.

Later in the day, the U.S. was to produce government data on initial jobless claims.


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