Dollar remains broadly higher, Draghi comments eyed

Published 11/08/2012, 08:10 AM
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Investing.com - The U.S. dollar remained broadly higher against the other major currencies on Thursday, as concerns over U.S. fiscal policy supported dollar demand, while investors awaited the European Central Bank’s post-policy meeting press conference later in the day.

During European afternoon trade, the dollar was hovering close to a two-month high against the euro, with EUR/USD down 0.27% to 1.2736.

The euro eased off session lows against the greenback after the ECB said it was maintaining the benchmark interest rate at a record-low 0.75%, in line with market expectations. 

Investors were awaiting ECB President Mario Draghi's press conference later in the session, amid concerns that the economic slump in the euro zone is deepening.

The euro remained under pressure after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to request a bailout before the end of this year.

Overall market sentiment continued to be weighed by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, which could threaten U.S. and global growth.

The greenback was almost unchanged against the pound, with GBP/USD inching up 0.02% to 1.5986.

Sterling found support after the Bank of England said it was maintaining the benchmark interest rate at 0.50% and the size of its asset purchase program unchanged at GBP375 billion, following its policy-setting meeting.

Elsewhere, the greenback was lower against the yen, with USD/JPY sliding 0.18% to 79.84, but was higher against the Swiss franc, with USD/CHF up 0.23% to 0.9468.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.03% to 0.9970, AUD/USD edging up 0.01% to 1.0411 and NZD/USD down 0.19% to 0.8169.

Official data earlier showed that the Australian economy added 10,700 jobs in October, far more than the expected 200 increase, while the unemployment rate remained unchanged at 5.4%, beating expectations for a rise to 5.5%.

In New Zealand, government data showed that the unemployment rate jumped to 7.3% in the third quarter, up from 6.8% in the previous quarter and a 13-year high.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% to 80.99.

Later Thursday, the U.S. was to publish official data on the trade balance as well as the weekly government report on initial jobless claims.



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