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Dollar mixed vs. rivals amid Greek uncertainty

Published 02/21/2012, 04:48 AM
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Investing.com - The U.S. dollar was mixed against its major counterparts on Tuesday, as uncertainty over Greece’s ability to overcome its debt burden despite the announcement of a new bailout package weighed on sentiment.

During European late morning trade, the dollar was lower against the euro, with EUR/USD rising 0.21% to hit 1.3269.

Euro zone finance ministers agreed on the details of a EUR130billion financial package for Greece, which will cut the country’s debt-to-gross domestic product ratio to 120.5% of GDP in eight years and the rate of the original bailout loan is to be reduced.

The country’s private creditors accepted a more than 53% voluntary write down on the value on the bonds they hold.

But investors remained wary as concerns over the implementation of the package lingered, while the Troika, which is composed of the European Union, European Central Bank and the International Monetary Fund, said that "additional debt relief" will be required in the future.

The greenback was steady against the pound, with GBP/USD edging up 0.03% to hit 1.5854.

Official data showed earlier that public sector net borrowing in the U.K. fell more-than-expected in January, declining by GBP10.7 billion after a GBP11.1 billion rise the previous month.

Analysts had expected public sector net borrowing to fall by GBP8.9 billion in January.

The greenback was higher against yen but lower against the Swiss franc, with USD/JPY adding 0.26% to hit 79.83 and USD/CHF dipping 0.09%, to hit 0.9107.

In Switzerland, official data showed that the country’s trade surplus narrowed unexpectedly in January, falling to CHF1.55 billion from a surplus of CHF2.01 billion the previous month.

Analysts had expected Switzerland’s trade surplus to widen to CHF2.50 billion in January.

Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD gaining 0.12% to hit 0.9946, AUD/USD shedding 0.56% to hit 1.0695 and NZD/USD sliding 0.35% to hit 0.8371.

Earlier in the day, the Reserve Bank of Australia said in the minutes of its February meeting that it remained willing to ease policy if commodity and raw material demand were to “weaken materially” although it left rates unchanged this month.

Meanwhile, the Reserve Bank of New Zealand said that its inflation expectations fell to 2.5% in the first quarter from 2.8% the previous quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.11% to hit 79.01.


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