Dollar broadly lower on Greek debt deal

Published 02/09/2012, 11:21 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Thursday, after Greek Prime Minister Lucas Papademos said an agreement on austerity measures required to secure a second bailout had been completed.

During U.S. morning trade, the dollar was down against the euro, with EUR/USD rising 0.38% to hit 1.3312.

Mr. Papademos said political leaders had agreed on the conditions set by international creditors in exchange for a new bailout worth EUR130 billion.

Greek Finance Minister Evangelos Venizelos was expected to present the details of the agreement for discussion at a meeting of euro zone finance ministers later Thursday.

Earlier in the day, the European Central Bank left its benchmark interest rate unchanged at a record-low 1.0% for the second consecutive month, in a widely expected decision.

Speaking at the bank’s post-policy meeting press conference, ECB President Mario Draghi said collateral rules will be relaxed in order to ease credit conditions in the region.

Mr. Draghi also said the central bank would not accept a loss on its holdings of Greek bonds, but stopped short of ruling out a role for the ECB in a new bailout package for Greece.

The greenback was also lower against the pound, with GBP/USD rising 0.26% to hit 1.5859.

The Bank of England increased its quantitative easing program by GBP50 billion earlier, citing the "significant margin" of slack in the British economy and left interest rates unchanged at 0.5% in a widely expected decision.

Earlier Thursday, official data showed that manufacturing production in the U.K. rose significantly more-than-expected in December, increasing for the first time in three months, while industrial production also rose more-than-expected.

A separate report showed that the U.K. goods trade deficit narrowed more-than-expected in January.

The greenback was higher against yen but lower against the Swiss franc, with USD/JPY adding 0.37% to hit 77.32 and USD/CHF shedding 0.28% to hit 0.9098.

A report earlier showed that Switzerland's consumer climate index improved slightly more-than-expected in January.

Elsewhere, the greenback was slightly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.14% to hit 0.9945, AUD/USD easing up 0.05% to hit 1.0803 and NZD/USD easing up 0.11% to hit 0.8360.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.07% to hit 78.67.

Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 15,000 to a seasonally adjusted 358,000, beating expectations for a decline to 370,000.

The previous week’s figure was revised up to 373,000 from 367,000.

Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 13 of the past 15 weeks.


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