Investing.com - The U.S. dollar remained lower against its major counterparts in quiet, holiday thinned trade on Monday as fears over the possibility of a Greek exit from the euro zone abated, dampening safe haven demand.
During European afternoon trade, the dollar was lower against the euro, with EUR/USD rising 0.46% to hit 1.2573.
Investor sentiment firmed up after a weekend opinion poll indicated that Greek pro-bailout party New Democracy may be able to form a government following elections on June 17, after inconclusive election results earlier this month sparked fears that the country could be forced out of the euro area.
But sentiment remained fragile amid uncertainty over the outcome of the June elections, while fears over the health of Spain’s banking sector and the country’s rising borrowing costs also weighed.
Spain’s government announced Sunday that it was to recapitalize one of the country’s largest commercial lenders, fuelling fresh fears that the rising cost of bank rescues could force Madrid into seeking an international bailout.
Spain’s Treasury auctioned the full targeted amount of EUR3.5 billion of two-year bonds earlier, but the yield climbed to 4.03%, up sharply from 3.35% at a similar auction in April.
Meanwhile, the yield on Spanish 10-year government bonds climbed to 6.50% on Monday, up from 6.34% on Friday.
The greenback was also lower against the pound, with GBP/USD rising 0.19% to hit 1.5695.
Elsewhere, the greenback was weaker against the yen and the Swiss franc, with USD/JPY shedding 0.35% to hit 79.39 and USD/CHF losing 0.37% to hit 0.9560.
Earlier Monday, the minutes of the Bank of Japan’s April 27 meeting said that policymakers agreed to ease monetary policy in order to ensure the continued economic recovery, but said that the central bank needs to counter the “misunderstanding” in markets that easing will automatically continue until the bank’s 1% inflation target is met.
The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.54% to hit 1.0236, AUD/USD jumping 1.14% to hit 0.9868 and NZD/USD rallying 1.20% to hit 0.7628.
In Australia, central bank Governor Glenn Stevens said that in addition to the debt crisis in the euro zone, China’s slowing growth poses a threat to the Australian economy and must be closely monitored.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.48%, to trade at 82.12.
Trade looked likely to remain quiet on Monday, with some markets in Europe closed for holidays, while markets in the U.S. were to remain closed for the Memorial Day holiday.
During European afternoon trade, the dollar was lower against the euro, with EUR/USD rising 0.46% to hit 1.2573.
Investor sentiment firmed up after a weekend opinion poll indicated that Greek pro-bailout party New Democracy may be able to form a government following elections on June 17, after inconclusive election results earlier this month sparked fears that the country could be forced out of the euro area.
But sentiment remained fragile amid uncertainty over the outcome of the June elections, while fears over the health of Spain’s banking sector and the country’s rising borrowing costs also weighed.
Spain’s government announced Sunday that it was to recapitalize one of the country’s largest commercial lenders, fuelling fresh fears that the rising cost of bank rescues could force Madrid into seeking an international bailout.
Spain’s Treasury auctioned the full targeted amount of EUR3.5 billion of two-year bonds earlier, but the yield climbed to 4.03%, up sharply from 3.35% at a similar auction in April.
Meanwhile, the yield on Spanish 10-year government bonds climbed to 6.50% on Monday, up from 6.34% on Friday.
The greenback was also lower against the pound, with GBP/USD rising 0.19% to hit 1.5695.
Elsewhere, the greenback was weaker against the yen and the Swiss franc, with USD/JPY shedding 0.35% to hit 79.39 and USD/CHF losing 0.37% to hit 0.9560.
Earlier Monday, the minutes of the Bank of Japan’s April 27 meeting said that policymakers agreed to ease monetary policy in order to ensure the continued economic recovery, but said that the central bank needs to counter the “misunderstanding” in markets that easing will automatically continue until the bank’s 1% inflation target is met.
The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.54% to hit 1.0236, AUD/USD jumping 1.14% to hit 0.9868 and NZD/USD rallying 1.20% to hit 0.7628.
In Australia, central bank Governor Glenn Stevens said that in addition to the debt crisis in the euro zone, China’s slowing growth poses a threat to the Australian economy and must be closely monitored.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.48%, to trade at 82.12.
Trade looked likely to remain quiet on Monday, with some markets in Europe closed for holidays, while markets in the U.S. were to remain closed for the Memorial Day holiday.