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Dollar remains steady in cautious trade

Published 10/10/2012, 11:54 AM
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Investing.com - The U.S. dollar was steady against the other major currencies on Wednesday, as investors adopted a wait-and-see approach while they awaited fresh developments in the euro zone.

During U.S. morning trade, the dollar was almost unchanged against the euro, with EUR/USD inching up 0.01% to 1.2887.

Market participants remained cautious 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.

Meanwhile, concerns over whether international creditors will extend loans to Greece continued, as the country struggles to meet deficit reduction targets.

The greenback was steady close to a one-month high against the pound, with GBP/USD inching up 0.03% to 1.6008.

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, with USD/JPY edging up 0.02% to 78.26, but inched lower against the Swiss franc, with USD/CHF easing down 0.10% to 0.9393.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.06% to 0.9788, AUD/USD climbing 0.34% to 1.0240 and NZD/USD dipping 0.07% to 0.8173.

The Australian dollar found support after the country’s treasury auctioned AUD4 billion in government debt earlier in the day.

Separately, a report by Westpac and the Melbourne Institute showed that Australian 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, inched down 0.02% to 80.08.

Trade was expected to remain subdued on Wednesday, with no major economic data releases on the calendar.


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