Dollar rangebound as Spain uncertainty, growth worries weigh

Published 10/10/2012, 05:34 AM
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Investing.com - The U.S. dollar was trading in a tight range against the other major currencies on Wednesday, as persistent concerns over the outlook for global growth and uncertainty over a possible Spanish bailout weighed on market sentiment.

During European morning trade, the dollar was higher against the euro, with EUR/USD slipping 0.19% to 1.2860.

The euro remained under pressure amid ongoing uncertainty over Spain’s position on requesting external financial aid and what form a bailout would take.

Earlier in the day, the International Monetary Fund said the crisis in the euro zone remains the greatest threat to the global economy and warned that policymakers need to urgently strengthen fiscal and financial ties within the euro area.

Elsewhere, Italy saw yields rise at an auction of short-term government debt, with the yield on 12-month bills climbing to 1.94% from 1.69% previously, the highest level since mid-August.

The greenback was steady close to a one-month high against the pound, with GBP/USD dipping 0.03% to 1.5997.

Sentiment on sterling remained fragile after a recent string of soft U.K. economic data undermined hopes for a sustained economic recovery and kept alive speculation over the possibility of another round of easing by the Bank of England.

Elsewhere, the greenback was fractionally higher against the yen and the Swiss franc, with USD/JPY edging up 0.06% to 78.30 and USD/CHF easing up 0.09% to 0.9410.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.04% to trade at 0.9786, AUD/USD easing up 0.16% to 1.0221 and NZD/USD dipping 0.09% to 0.8172.

In Australia, a report by Westpac and the Melbourne Institute showed that consumer sentiment improved only modestly in October, despite three interest rate cuts in the past six months by the country’s central bank.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, eased up 0.11% to 80.19.

Later in the day, Spanish Prime Minister Mariano Rajoy was to hold talks with French President Francois Hollande in Paris.



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