Dollar broadly higher vs. rivals on Greece woes

Published 05/16/2012, 04:51 AM
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Investing.com - The U.S. dollar was broadly higher against its major counterparts on Wednesday, as ongoing concerns over Greece’s political impasse and a potential exit from the euro zone dampened demand for riskier assets.

During European morning trade, the dollar was higher against the euro, with EUR/USD edging down 0.13% to hit 1.2714.

The euro came under pressure after Greek political leaders announced Tuesday they failed to reach an agreement to form a government, following a May 6 election which left no party with a clear majority.

Greek politicians were to meet later Wednesday to appoint a caretaker government to lead the country until fresh elections can be held in June.

But uncertainty over the outcome of the next elections fueled speculation that the country will not be able to access further financial aid and may eventually be forced to exit the euro zone.

The greenback was higher against the pound, with GBP/USD falling 0.24% to hit 1.5954.

Official data showed that the number of people claiming unemployment benefits in the U.K. fell by a seasonally adjusted 13,700 in April, recording the largest monthly drop since July 2010 and defying expectations for an increase of 5,000.

The rate of unemployment ticked down unexpectedly to 8.2% from 8.3%, down for the second consecutive month.

Elsewhere, the greenback was higher against the yen and the Swiss franc, with USD/JPY adding 0.21% to hit 80.35 and USD/CHF edging up 0.12% to hit 0.9447.

In Japan, government data showed earlier that tertiary industry activity fell more-than-expected in March, ticking down 0.6% after a flat reading the previous month.

The report came after data showed that Japan’s core machinery orders fell less-than-expected in March, declining 2.8% after a 2.8% rise the previous month.

The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.34% to hit 1.0106, AUD/USD shedding 0.34% to hit 0.9902 and NZD/USD declining 0.55% to hit 0.7651.

The Westpac Banking Corporation said earlier that consumer sentiment in Australia rose 0.8% to 95.3 in May, hovering close to the weakest level this year and following a 1.6% fall the previous month.

A separate report showed that Australian wages rose 0.9% in the first quarter, in line with expectations, after a 1% rise the previous quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13%, at 81.56.

Later in the day, the U.S. was to produce official data on building permits and housing starts, followed by reports on the capacity utilization rate and industrial production. In addition, the Federal Reserve was to publish the minutes of its most recent policy meeting.


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