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Dollar broadly lower as Greece hopes lift risk appetite

Published 12/03/2012, 11:03 AM
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Investing.com - The U.S. dollar fell to a six-week low against the euro on Monday and was broadly lower against the other major currencies as concerns over debt stricken Greece and Spain abated and markets shrugged off unexpectedly weak U.S. manufacturing data.

During U.S. morning trade, the dollar was down against the euro, with EUR/USD climbing 0.65% to 1.3071.

Demand for the single currency was boosted after Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.

The euro hit fresh session highs after Spain formally requested a bailout worth EUR37 billion for its banking sector.

Elsewhere, data showed that the final euro zone manufacturing purchasing managers’ index remained unchanged at 46.2 in November, the highest level since March, but remaining in contraction territory for the 16th consecutive month.

The data came after a report showed that showed that the final HSBC manufacturing PMI for China rose to 50.5 in November from 49.5 the previous month, indicating that economic activity is picking up.

The greenback was lower against the pound, with GBP/USD up 0.55% to 1.6097.

In the U.K., data showed that the manufacturing PMI rose to 49.1 last month, its highest level since August, from October's downwardly revised 47.3 and beating expectations for a reading of 48.1.

The greenback pulled back from multi-month highs against the yen, with USD/JPY down 0.25% to 82.26 and was also weaker against the Swiss franc, with USD/CHF falling 0.37% to 0.9245.

The yen remained under pressure ahead of upcoming elections on December 16 which could lead to further monetary easing by the Bank of Japan.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.07% to 0.9934, AUD/USD inching down 0.01% to 1.0424 and NZD/USD adding 0.18% to trade at 0.8216.

The Australian dollar remained under pressure after official data showing that domestic retail sales were flat in October fuelled expectations for a rate cut by the Reserve Bank of Australia at its policy meeting on Tuesday.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.52% to 79.81.

In the U.S., a report from the Institute for Supply Management showed that manufacturing activity deteriorated unexpectedly in November, contracting for the first time in three months.

The ISM manufacturing PMI fell to 49.5 in November from a reading of 51.7 in October, worse than expectations for a decline to 51.3.



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