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Forex - Dollar stays down vs. rivals on debt talks impasse

Published 07/26/2011, 11:04 AM
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Investing.com – The U.S. dollar remained lower against all of its major rivals on Tuesday, following the release of a flurry of mixed U.S. data and as talks on raising the U.S. debt ceiling remained deadlocked.

During early U.S. trade, the greenback was down against the euro, with EUR/USD climbing 0.80% to hit 1.4491.

Earlier in the day, Spain and Italy paid a higher price than a month ago to sell short-term debt, raising concerns that last week’s agreement on a second bailout package for Greece has not fully addressed the issues relating to the euro zone’s sovereign debt crisis.

The greenback was also down against the pound, with GBP/USD advancing 0.70% to hit 1.6389.

Official data showed earlier that the U.K. economy grew by 0.2% in the second quarter, in line with expectations, bringing the annualized rate of growth to 0.7%, the lowest since the first quarter of 2010.

Elsewhere, the greenback was trading close to a four-month trough against the yen and a record low against the Swiss franc, with USD/JPY shedding 0.26% to hit 78.07 and USD/CHF dropping 0.34% to hit 0.8032.

Japan’s Finance Minister Yoshihiko Noda repeated earlier that recent currency moves were one-sided and that he was closely watching market developments.

In addition, the greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.42% to hit 0.9432, AUD/USD jumping 0.93% to hit 1.0945 and NZD/USD climbing 0.72% to hit 0.8702.

Earlier Tuesday, official data showed that New Zealand’s trade surplus narrowed in June as exports fell to a five-month low.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.70%.

Earlier in the day, the Commerce Department said that U.S. new home sales fell unexpectedly in June, but a sharp increase in prices and decreased supply suggested the market for new houses was beginning to stabilize.

Separate reports showed that U.S. consumer confidence rose unexpectedly in June, while the S&P/Case-Shiller home price index fell slightly more-than-expected in May, declining for the eleventh consecutive month.

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