Dollar broadly stronger as euro zone fin min meeting awaited

Published 03/12/2012, 09:16 AM
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Investing.com - The U.S. dollar was broadly stronger against its global counterparts on subdued trade on Monday, as concerns over the implications of Greece’s debt swap dampened risk appetite, while Friday’s strong U.S. jobs data continued to support the greenback.

During European afternoon trade, the dollar was fractionally higher against the euro, with EUR/USD dipping 0.02% to hit 1.3119.

The single currency remained under pressure after the International Swaps and Derivatives Association said Friday that Greece’s debt swap with private creditors constituted a “credit event”, which would activate credit-default swaps, designed to protect investors against losses on Greek sovereign debt.

Meanwhile, the greenback remained supported as Friday’s robust U.S. employment data dampened expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.

The Department of Labor said the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain. The unemployment rate held steady at a three year low of 8.3%.

The greenback was higher against the pound, with GBP/USD adding 0.25% to hit 1.5634.

The greenback was lower against the yen and remained almost unchanged against the Swiss franc, with USD/JPY shedding 0.38% to hit 82.16 and USD/CHF inching up 0.01% to hit 0.9189.

Earlier in the day, Japanese officials reiterated concerns over the strength of the yen, despite a recent weakening in the currency.

Prime Minister Yoshihiko Noda said that the yen was still "strong," while Finance Minister Jun Azumi reiterated warnings against any "excessively speculative movements."

Elsewhere, the greenback was stronger against its Canadian, Australian and New Zealand cousins, with USD/CAD up 0.23% to hit 0.9928, AUD/USD falling 0.76% to hit 1.0496 and NZD/USD dropping 0.75% to hit 0.8151.

Sentiment on the growth linked dollars was hit earlier after official data showed that China posted the largest trade deficit in 12 years in February, as exports declined.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was unchanged on the day at 80.42.

Later Monday, euro zone finance ministers were to hold talks in Brussels, to give their final approval to a EUR130 billion bailout for Greece.

The ministers were also likely to discuss Spain, after Prime Minister Mariano Rajoy announced earlier this month that the country would cut its deficit to 5.8% of gross domestic product, instead of the planned 4.4% in 2012.

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