Investing.com - The U.S. dollar was mostly higher against most of its major counterparts on Tuesday, as markets were jittery ahead of a ruling by Germany's top court on whether the EU's permanent bailout fund is compatible with national law.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.37% to hit 1.2267.
Germany's top court was due to decide whether the EU's permanent bailout fund is compatible with national law, potentially leading to deeper fiscal integration within the region.
German finance minister Wolfgang Schauble said that any delay to the region’s permanent rescue fund could rattle financial markets and cause “considerable uncertainty” among investors.
Traders also eyed talks between EU finance ministers, after their euro zone counterparts held a previous meeting on Monday.
Euro zone ministers agreed on Monday to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.
They made no apparent progress, however, on activating the bloc's rescue funds to intervene in bond markets and bring down Spain and Italy’s spiraling borrowing costs.
Spain’s 10-year government bonds eased sharply to 6.82% earlier, moving below the critical 7% threshold which is widely seen as unsustainable in the long term.
The greenback was also higher against the pound, with GBP/USD shedding falling 0.16% to hit 1.5501.
Sterling came under pressure after Bank of England Governor Mervyn King said that the expected U.K. recovery has not appeared and that he is worried over the outlook for U.K. exports due to the pound’s strength.
Sterling remained supported after official data showed that U.K. manufacturing production rose 1.2% in May, beating expectations for a 0.1% rise and following a 0.8% fall the previous month.
A separate report showed that the U.K.’s trade deficit narrowed more-than-expected in May, narrowing to GBP8.4 billion from a deficit of GBP9.7 billion the previous month.
Elsewhere, the greenback was lower against the yen and higher against the Swiss franc, with USD/JPY shedding 0.19% to hit 79.40 and USD/CHF edging up 0.33% to hit 0.9786.
Meanwhile, the greenback was moderately lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing 0.02% to hit 1.0189, AUD/USD adding 0.1% to hit 1.0218 and NZD/USD easing up 0.08% to hit 0.7969.
Fears over the global economic outlook intensified after official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
But market sentiment found support amid expectations that relentlessly poor data from China will push policy makers to introduce fresh stimulus to support the economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.2%, to trade at 83.44.
European Union finance ministers were to hold talks in Brussels throughout the day.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.37% to hit 1.2267.
Germany's top court was due to decide whether the EU's permanent bailout fund is compatible with national law, potentially leading to deeper fiscal integration within the region.
German finance minister Wolfgang Schauble said that any delay to the region’s permanent rescue fund could rattle financial markets and cause “considerable uncertainty” among investors.
Traders also eyed talks between EU finance ministers, after their euro zone counterparts held a previous meeting on Monday.
Euro zone ministers agreed on Monday to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.
They made no apparent progress, however, on activating the bloc's rescue funds to intervene in bond markets and bring down Spain and Italy’s spiraling borrowing costs.
Spain’s 10-year government bonds eased sharply to 6.82% earlier, moving below the critical 7% threshold which is widely seen as unsustainable in the long term.
The greenback was also higher against the pound, with GBP/USD shedding falling 0.16% to hit 1.5501.
Sterling came under pressure after Bank of England Governor Mervyn King said that the expected U.K. recovery has not appeared and that he is worried over the outlook for U.K. exports due to the pound’s strength.
Sterling remained supported after official data showed that U.K. manufacturing production rose 1.2% in May, beating expectations for a 0.1% rise and following a 0.8% fall the previous month.
A separate report showed that the U.K.’s trade deficit narrowed more-than-expected in May, narrowing to GBP8.4 billion from a deficit of GBP9.7 billion the previous month.
Elsewhere, the greenback was lower against the yen and higher against the Swiss franc, with USD/JPY shedding 0.19% to hit 79.40 and USD/CHF edging up 0.33% to hit 0.9786.
Meanwhile, the greenback was moderately lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing 0.02% to hit 1.0189, AUD/USD adding 0.1% to hit 1.0218 and NZD/USD easing up 0.08% to hit 0.7969.
Fears over the global economic outlook intensified after official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
But market sentiment found support amid expectations that relentlessly poor data from China will push policy makers to introduce fresh stimulus to support the economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.2%, to trade at 83.44.
European Union finance ministers were to hold talks in Brussels throughout the day.