Investing.com - The U.S. dollar was broadly higher against most of its major counterparts on Monday, as safe haven demand was boosted by growing fears that a political deadlock in Greece could force the country’s exit from the euro zone.
During European afternoon trade, the dollar was trading close to a four-month high against the euro, with EUR/USD shedding 0.55% to hit 1.2843.
Speculation over the possibility of a Greek exit from the euro zone intensified, as talks aimed at forming a coalition government remained at an impasse, fuelling fears that a fresh round of elections is becoming inevitable and casting the country’s ability to uphold its fiscal commitments into doubt.
Meanwhile, concerns over the health of Spain’s banking system persisted, pushing the yield on Spanish 10-year bonds to 6.27%, the highest level since December after the country sold EUR2.90 billion of 12-month and 18-month bonds, in an auction which saw short-term borrowing costs rise.
Adding to the bearish sentiment, official data showed that industrial production in the euro zone unexpectedly declined 0.3% in March, against expectations for a 0.4% increase, adding to fears over the health of the region’s economy.
The greenback was little changed against the pound, with GBP/USD inching up 0.01% to hit 1.6071.
Elsewhere, the greenback slid lower against the yen but extended gains against the Swiss franc, with USD/JPY losing 0.18% to hit 79.79 and USD/CHF climbing 0.56% to hit 0.9350.
In Switzerland, official data showed that producer prices dipped 0.1% in April, declining for the first time in five months and defying expectations for a 0.3% increase.
The greenback was stronger against its Canadian counterpart and rose to multi-month highs against its Australian and New Zealand cousins, with USD/CAD rising 0.44% to hit 1.0049, AUD/USD down 0.46% to hit 0.9972 and NZD/USD tumbling 0.70% to hit 0.7773.
Sentiment on the growth linked dollars was hit after China’s central bank said it was to cut the reserve requirement ratios for banks, in an attempt to bolster economic growth.
Also Monday, official data showed that retail sales in New Zealand fell sharply in the first quarter, declining 1.5%, after increasing by 2.2% in the preceding quarter. Analysts had expected retail sales to decline by 0.5% in the three months to March.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44% to trade at a two-month high of 80.78.
Later in the day, European Union finance ministers were to hold talks in Brussels. In addition Greece’s president was due to hold last-ditch cross party talks in an attempt to avert fresh elections.
During European afternoon trade, the dollar was trading close to a four-month high against the euro, with EUR/USD shedding 0.55% to hit 1.2843.
Speculation over the possibility of a Greek exit from the euro zone intensified, as talks aimed at forming a coalition government remained at an impasse, fuelling fears that a fresh round of elections is becoming inevitable and casting the country’s ability to uphold its fiscal commitments into doubt.
Meanwhile, concerns over the health of Spain’s banking system persisted, pushing the yield on Spanish 10-year bonds to 6.27%, the highest level since December after the country sold EUR2.90 billion of 12-month and 18-month bonds, in an auction which saw short-term borrowing costs rise.
Adding to the bearish sentiment, official data showed that industrial production in the euro zone unexpectedly declined 0.3% in March, against expectations for a 0.4% increase, adding to fears over the health of the region’s economy.
The greenback was little changed against the pound, with GBP/USD inching up 0.01% to hit 1.6071.
Elsewhere, the greenback slid lower against the yen but extended gains against the Swiss franc, with USD/JPY losing 0.18% to hit 79.79 and USD/CHF climbing 0.56% to hit 0.9350.
In Switzerland, official data showed that producer prices dipped 0.1% in April, declining for the first time in five months and defying expectations for a 0.3% increase.
The greenback was stronger against its Canadian counterpart and rose to multi-month highs against its Australian and New Zealand cousins, with USD/CAD rising 0.44% to hit 1.0049, AUD/USD down 0.46% to hit 0.9972 and NZD/USD tumbling 0.70% to hit 0.7773.
Sentiment on the growth linked dollars was hit after China’s central bank said it was to cut the reserve requirement ratios for banks, in an attempt to bolster economic growth.
Also Monday, official data showed that retail sales in New Zealand fell sharply in the first quarter, declining 1.5%, after increasing by 2.2% in the preceding quarter. Analysts had expected retail sales to decline by 0.5% in the three months to March.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44% to trade at a two-month high of 80.78.
Later in the day, European Union finance ministers were to hold talks in Brussels. In addition Greece’s president was due to hold last-ditch cross party talks in an attempt to avert fresh elections.