Dollar broadly lower as ECB LTRO in focus

Published 02/28/2012, 04:36 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Tuesday, as market sentiment firmed up ahead of a liquidity boosting operation by the European Central Bank.

During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.26% to hit 1.3432.

On Monday, Germany’s parliament endorsed the euro zone’s second bailout for Greece by a comfortable margin.

Ahead of the vote, German Chancellor Angela Merkel warned that that if the deal was not approved the risks to the European Union and the global economy would be “incalculable”.

The euro remained supported despite Monday’s announcement by ratings agency Standard & Poor’s that it had cut Greece’s long term credit rating to 'selective default'.

Investors were looking ahead to Wednesday's launch of the ECB’s second three-year long-term refinancing operation, after a similar liquidity injection in December eased pressure on peripheral euro zone bond markets.

The greenback was lower against the pound, with GBP/USD adding 0.20% to hit 1.5855.

The greenback edged higher against the yen but weakened against the Swiss franc, with USD/JPY easing up 0.10% to hit 80.72 and USD/CHF slipping 0.24% to hit 0.8970.

In Japan official data showed that retail sales rose unexpectedly in January, climbing 1.9% after a 2.5% rise the previous month, defying expectations for a decline of 0.2%.

Elsewhere, a report showed that Switzerland's UBS consumption indicator eased down slightly in January, but consumer sentiment looks likely to remain robust in the coming months.

A separate report showed that the number of people employed in Switzerland declined less-than-expected in the fourth quarter.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.30% to hit 0.9959, AUD/USD easing up 0.09% to hit 1.0767 and NZD/USD sliding 0.24% to hit 0.8389.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25% to hit 78.43.

Later in the day, the U.S. was to produce official data on durable goods orders, as well as reports on house price inflation and consumer confidence.


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