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Dollar regains ground vs. rivals amid Greece jitters

Published 07/09/2015, 06:18 AM
Dollar rises broadly as focus remains on Greece talks
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Investing.com - The dollar was higher against a basket of other major currencies on Thursday, as markets eyed fresh reform proposals from Greece after the country requested a new three-year bailout on Wednesday.

The greenback broadly weakened after the minutes of the Federal Reserve's June policy meeting released on Wednesday showed that policy makers need to see more signs of a strengthening U.S. economy before raising interest rates.

In its June policy statement, the central bank had indicated that it was on track for at least one and perhaps a second rate increase later this year.

The minutes also pointed to concerns over Greece's financial problems, signaling that global market turmoil could derail the Fed's rate hike plans if contagion spreads.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.28% at 96.65, not far from Tuesday's one-month peak of 97.45.

EUR/USD slid 0.36% to 1.1039 after Greece requested a new three-year bailout from its euro zone creditors and pledged some economic overhauls on Wednesday.

Whether European leaders accept Greece's request for more emergency loans at a crisis summit on Sunday will depend on whether Prime Minister Alexis Tsipras makes a drastic turnaround on pension cuts, tax increases and other austerity measures after five months of negotiations.

German Finance Minister Wolfgang Schäuble said that "the actual examination can only begin once the full package has been put on the table."

The pound was higher, with GBP/USD up 0.23% to 1.5396.

Later Thursday, the Bank of England was expected leave its monetary policy unchanged, with the benchmark interest rate at 0.50% and the asset purchase facility at £375 billion.

Elsewhere, the dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.58% to 121.41 and with USD/CHF climbing 0.55% to 0.9506.

The yen turned lower as Chinese shares closed sharply higher Thursday morning, easing demand for safe haven assets.

Chinese shares had plummeted on Wednesday, extending a broad based selloff despite fresh regulatory measures to restore investor confidence.

The Australian dollar was steady, with AUD/USD at 0.7427, off Wednesday's six-year lows of 0.7368, while NZD/USD fell 0.27% to 0.6710.

Earlier Thursday, data showed that the number of employed people in Australia rose by 7,300 last month, beating expectations for a 5,000 decline. The number of employed people increased by 39,900 in May, whose figure was revised from a previously estimated 42,000 gain.

Australia's unemployment rate ticked up to 6.0% in June from a revised rate of 5.9% the previous month, compared to expectations for a rise to 61%.

USD/CAD slipped 0.18% to trade at 1.2720, not far from Tuesday's three-month peak of 1.2779.

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