Dollar broadly higher in cautious trade

Published 10/29/2012, 06:55 AM
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Investing.com - The U.S. dollar was broadly higher against the other major currencies on Monday, as investors remained cautious amid uncertainty over Spain and Greece, while the outlook for the global economy was clouded by a recent spate of weak corporate earnings reports.

During European morning trade, the dollar pushed higher against the euro, with EUR/USD down 0.26% to 1.2905.

Sentiment on the single currency was hit by ongoing uncertainty over when Spain may request a bailout, while doubts over whether Greece can meet austerity targets also weighed.

Later Monday, Spanish Prime Minister Mariano Rajoy was to hold talks with Italian Prime Minister Mario Monti in Madrid, as pressure mounted on Spain to request aid.

Meanwhile, concerns over the global economic outlook persisted in spite of Friday’s better-than-expected U.S. data on economic growth, as weak third quarter corporate earnings fuelled fears over a slowdown in demand.

The greenback was higher against the pound, with GBP/USD sliding 0.28% to 1.6058.

The pound shrugged off official data showing that U.K. bank lending rose at the fastest pace in more than four-and-a-half years in September, while mortgage approvals also came in higher than expected.

The Bank of England said total net lending to individuals rose to GBP1.7 billion in September, after a decline of GBP0.3 billion in August, the strongest rise since February 2008. Analysts had expected net lending to increase to GBP0.6 billion.

The BoE said mortgage approvals rose to 50,024 in September, up from 47,921 in August, beating analysts' forecasts for 48,000.

Elsewhere, the greenback edged lower against the yen, with USD/JPY inching down 0.12% to 79.54, but gained ground against the Swiss franc, with USD/CHF rising 0.22% to 0.9368.

Market participants were anticipating the outcome of the Bank of Japan’s policy meeting on Tuesday amid expectations for further easing steps by the central bank.

Earlier Monday, official data showed that Japanese retail sales rose 0.4% in September compared to the same month last year, after a revised 1.7% rise in August. Economist had predicted a 1.0% increase.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.22% to 0.9992, AUD/USD slipping 0.16% to 1.0357 and NZD/USD losing 0.19% to trade at 0.8211.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.20% to 80.25.

Trading activity was expected to remain thin during U.S. hours on Monday, as a result of the first market-wide, unscheduled closure since September 2001 as Hurricane Sandy made landfall in the northeastern U.S.


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