Dollar broadly higher as Greece vote, U.S. elections loom

Published 11/05/2012, 05:19 AM
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Investing.com - The U.S. dollar was trading close to a five-week high against the euro and was broadly higher against the other major currencies on Monday, as concerns over  a Greek parliamentary vote and uncertainty ahead of U.S. presidential elections supported safe haven demand.

During European morning trade, the dollar was higher against the euro, with EUR/USD down 0.32% to 1.2795.

The single currency was weighed by concerns over whether Greece’s Parliament would approve a package of spending cuts and tax hikes in a vote on Wednesday, which will determine if Athens receives its next tranche of financial aid.

Meanwhile, investors were focused on the outcome of Tuesday’s U.S. presidential elections, amid concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.

The greenback was also higher against the pound, with GBP/USD losing 0.26% to trade at 1.5982.

In the U.K., data showed that the services purchasing managers index fell to 50.6 in October from 52.2 in September, compared to expectations for a reading of 52.0.

The weaker-than-expected data fuelled concerns over the outlook for the economic recovery and sparked concerns over the possibility of more easing by the Bank of England.

Elsewhere, the greenback was lower against the yen, with USD/JPY down 0.28% to 80.24, but gained ground against the Swiss franc, with USD/CHF rising 0.31% to 0.9428.

The greenback was little changed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.06% to 0.9963, AUD/USD easing up 0.07% to 1.0345 and NZD/USD slipping 0.12% to 0.8240.

The Australian dollar was higher earlier in the session after official data showed that Australia's trade deficit narrowed to AUD1.46 billion in October, from a deficit of AUD1.88 billion the previous month.

Another report showed that retail sales in Australia rose by 0.5% last month, slightly more than the expected 0.4% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.19% to 80.80.

Later Monday, the Institute of Supply Management was to publish data on U.S. service sector activity.



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