Investing.com - The U.S. dollar added to gains against almost all of the other major currencies on Tuesday, as a combination of worries over the outlook for global growth and uncertainty over Spain and Greece bolstered demand for the safety of the greenback.
During U.S. morning trade, the dollar advanced to a one-week high against the euro, with EUR/USD dropping 0.65% to 1.2883.
Overall market sentiment was hit after the International Monetary Fund cut its forecast for global growth this year to 3.3% from 3.5% and warned that a failure by European and U.S. policymakers to tackle current problems could threaten what it said was an already “slow and bumpy” economic recovery.
The euro remained under pressure amid uncertainty over how soon Spain may formally request a bailout after euro zone finance ministers said Monday that Madrid did not need external financial aid yet.
Investors also remained cautious amid ongoing uncertainty over whether international creditors will extend loans to Greece, as the country struggles to meet deficit reduction targets.
Earlier Tuesday, German Chancellor Angel Merkel said that Greece was on a “tough path” following talks with Prime Minister Antonis Samaras in Athens, but added that she believed austerity would pay off.
The greenback hit a one-month high against the pound, with GBP/USD down 0.24% to 1.5987.
Sterling came under pressure after the IMF said the U.K. economy would contract by 0.4% this year before recovering to 1.1% growth in 2013, compared to its July forecast for 0.2% growth this year and 1.4% growth in 2013.
Meanwhile, official data showed that manufacturing production in the U.K. fell by 1.1% in August, compared to expectations for a 0.6% drop, while industrial production declined 0.5%, in line with expectations.
A separate report showed that the U.K. trade deficit widened to GBP9.8 billion in August, against expectations for a deficit of GBP8.5 billion.
Elsewhere, the greenback was lower against the yen, with USD/JPY slipping 0.17% to 78.20, but added to gains against the Swiss franc, with USD/CHF rallying 0.71% to 0.9397.
The greenback pushed higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.31% to 0.9798, AUD/USD dipping 0.07% to 1.0183 and NZD/USD losing 0.32% to trade at 0.8165.
The commodity linked dollars had found support earlier in the session after China moved to inject liquidity into markets, fuelling speculation that Beijing may announce more stimulus measures.
In Canada, industry data showed that housing starts fell to 220,200 units in September from 225,300 units in August, beating expectations for a decline to 208,000.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.56% to 80.11.
Also Tuesday, European Central Bank President Mario Draghi reiterated that governments cannot rely on the ECB to fix the crisis in the region and said that national reforms were vital.
In testimony to the European Parliament, Mr. Draghi also warned that he expected economic activity in the euro zone to remain weak, calling the road ahead long and uphill.
During U.S. morning trade, the dollar advanced to a one-week high against the euro, with EUR/USD dropping 0.65% to 1.2883.
Overall market sentiment was hit after the International Monetary Fund cut its forecast for global growth this year to 3.3% from 3.5% and warned that a failure by European and U.S. policymakers to tackle current problems could threaten what it said was an already “slow and bumpy” economic recovery.
The euro remained under pressure amid uncertainty over how soon Spain may formally request a bailout after euro zone finance ministers said Monday that Madrid did not need external financial aid yet.
Investors also remained cautious amid ongoing uncertainty over whether international creditors will extend loans to Greece, as the country struggles to meet deficit reduction targets.
Earlier Tuesday, German Chancellor Angel Merkel said that Greece was on a “tough path” following talks with Prime Minister Antonis Samaras in Athens, but added that she believed austerity would pay off.
The greenback hit a one-month high against the pound, with GBP/USD down 0.24% to 1.5987.
Sterling came under pressure after the IMF said the U.K. economy would contract by 0.4% this year before recovering to 1.1% growth in 2013, compared to its July forecast for 0.2% growth this year and 1.4% growth in 2013.
Meanwhile, official data showed that manufacturing production in the U.K. fell by 1.1% in August, compared to expectations for a 0.6% drop, while industrial production declined 0.5%, in line with expectations.
A separate report showed that the U.K. trade deficit widened to GBP9.8 billion in August, against expectations for a deficit of GBP8.5 billion.
Elsewhere, the greenback was lower against the yen, with USD/JPY slipping 0.17% to 78.20, but added to gains against the Swiss franc, with USD/CHF rallying 0.71% to 0.9397.
The greenback pushed higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.31% to 0.9798, AUD/USD dipping 0.07% to 1.0183 and NZD/USD losing 0.32% to trade at 0.8165.
The commodity linked dollars had found support earlier in the session after China moved to inject liquidity into markets, fuelling speculation that Beijing may announce more stimulus measures.
In Canada, industry data showed that housing starts fell to 220,200 units in September from 225,300 units in August, beating expectations for a decline to 208,000.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.56% to 80.11.
Also Tuesday, European Central Bank President Mario Draghi reiterated that governments cannot rely on the ECB to fix the crisis in the region and said that national reforms were vital.
In testimony to the European Parliament, Mr. Draghi also warned that he expected economic activity in the euro zone to remain weak, calling the road ahead long and uphill.