Dollar mixed in cautious trade, U.S. data eyed

Published 03/05/2012, 08:23 AM
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Investing.com - The U.S. dollar was modestly lower against most of its major counterparts on Monday, but the greenback remained supported amid uncertainty over the outcome of a Greek debt restructuring deal and ahead of the release of key U.S. economic data.

During European afternoon trade, the dollar was modestly lower against the euro, with EUR/USD rising 0.18% to hit 1.3221.

Sentiment on the single currency remained fragile ahead of the March 8 deadline for Greece’s private creditors to join an agreement under which they will exchange their existing Greek holdings for new government bonds in a debt swap deal.

The euro found support after official data showed that retail sales across the euro zone rose for the first time in five months in January, increasing by a seasonally adjusted 0.3%, defying expectations for a 0.1% decline.

The positive data offset a report showing that the euro zone's services sector contracted at faster rate than initially estimated in February, shrinking for the fifth time in six months.

A separate report showed that investor confidence in the euro zone improved less-than-expected this month, remaining in negative territory for the eighth consecutive month.

The greenback was fractionally lower against the pound, with GBP/USD edging up 0.06% to hit 1.5843.

Earlier Monday, data showed that the U.K. service sector expanded in February, albeit at a slower than expected pace, fuelling hopes that the economy will avoid slipping into a recession in the first quarter.

The greenback was lower against the yen and the Swiss franc, with USD/JPY shedding 0.56% to hit 81.35 and USD/CHF sliding 0.20% to hit 0.9121.

In Switzerland, official data showed that retail sales increased at the fastest rate in seven months in January, jumping 4.4% year-over-year, after a 1.7% increase the previous month.

Meanwhile, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.40% to hit 0.9931, AUD/USD declining 0.34% to hit 1.0695 and NZD/USD falling 0.63% to hit 0.8238.

An industry report earlier showed that Australia’s services sector contracted in February, while government data showed that company operating profits fell unexpectedly in the fourth quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.14% to hit 79.36.

Also Monday, Chinese Premier Wen Jiabao cut the nation's economic growth target to 7.5% for 2012 earlier, down from a previous target of 8%, in order to allow the pace of economic expansion room to moderate if necessary.

Later in the day, the U.S. was to produce government data on factory orders, while the Institute of Supply Management was to release its closely watched report on U.S. service sector growth.


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