Investing.com - The U.S. dollar extended gains against the euro on Monday, as uncertainty over a European Union agreement on fresh measures to deal with the debt crisis in the euro zone dampened demand for higher-yielding assets.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.47% to hit a session low of 1.2602.
On Friday, European leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and to purchase government debt in order to keep borrowing costs down.
Leaders also agreed to set up a joint banking supervisory body for the euro area.
But the single currency came under pressure amid questions over the long-term effectiveness of the measures in addressing the root causes of the euro zone’s debt crisis and uncertainty over how and when the measures can be implemented.
Earlier Monday, Finland and the Netherland’s reiterated their opposition to using euro zone bailout funds to purchase government bonds.
Meanwhile, concerns over the outlook for the euro zone economy re-emerged after official data showed that the unemployment rate in the bloc rose to a record high 11.1% in May, up from 11.0% in April.
A separate report showed that the final reading of the euro zone manufacturing purchasing managers’ index came in at 45.1 in June, above the preliminary estimate of 44.8 and holding steady at its lowest level since June 2009.
The greenback was also higher against the pound, with GBP/USD sliding 0.20% to hit 1.5671.
The pound found some support earlier after data showed that manufacturing activity in the U.K. improved in June, but conditions remained fragile.
The U.K. manufacturing PMI rose to 48.6 in June from a reading of 45.9 in May, but remained below the 50 level which separates contraction from expansion. Analysts had expected a reading of 46.7.
Elsewhere, the greenback edged lower against the yen but was higher against the Swiss franc, with USD/JPY dipping 0.05% to hit 79.76 and USD/CHF climbing 0.55% to hit 0.9538.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.07% to hit 1.0173, AUD/USD adding 0.13% to hit 1.0249 and NZD/USD rising 0.22% to hit 0.8030.
Earlier Monday, data showed that China’s HSBC PMI posted a reading of 48.2 in June, little changed from an initial estimate of 48.1, remaining in contraction territory for the eighth successive month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.38%, to 82.03.
Later in the session, the Institute for Supply Management was to release a report on activity in the U.S. manufacturing sector.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.47% to hit a session low of 1.2602.
On Friday, European leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and to purchase government debt in order to keep borrowing costs down.
Leaders also agreed to set up a joint banking supervisory body for the euro area.
But the single currency came under pressure amid questions over the long-term effectiveness of the measures in addressing the root causes of the euro zone’s debt crisis and uncertainty over how and when the measures can be implemented.
Earlier Monday, Finland and the Netherland’s reiterated their opposition to using euro zone bailout funds to purchase government bonds.
Meanwhile, concerns over the outlook for the euro zone economy re-emerged after official data showed that the unemployment rate in the bloc rose to a record high 11.1% in May, up from 11.0% in April.
A separate report showed that the final reading of the euro zone manufacturing purchasing managers’ index came in at 45.1 in June, above the preliminary estimate of 44.8 and holding steady at its lowest level since June 2009.
The greenback was also higher against the pound, with GBP/USD sliding 0.20% to hit 1.5671.
The pound found some support earlier after data showed that manufacturing activity in the U.K. improved in June, but conditions remained fragile.
The U.K. manufacturing PMI rose to 48.6 in June from a reading of 45.9 in May, but remained below the 50 level which separates contraction from expansion. Analysts had expected a reading of 46.7.
Elsewhere, the greenback edged lower against the yen but was higher against the Swiss franc, with USD/JPY dipping 0.05% to hit 79.76 and USD/CHF climbing 0.55% to hit 0.9538.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.07% to hit 1.0173, AUD/USD adding 0.13% to hit 1.0249 and NZD/USD rising 0.22% to hit 0.8030.
Earlier Monday, data showed that China’s HSBC PMI posted a reading of 48.2 in June, little changed from an initial estimate of 48.1, remaining in contraction territory for the eighth successive month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.38%, to 82.03.
Later in the session, the Institute for Supply Management was to release a report on activity in the U.S. manufacturing sector.