Dollar steady as focus on euro zone fin min talks

Published 11/20/2012, 08:30 AM
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Investing.com - The U.S. dollar was steady against the other major currencies on Tuesday, amid guarded hopes that euro zone finance ministers would unlock a delayed bailout payment for Greece ahead of upcoming talks in Brussels.

During European afternoon trade, the dollar was almost unchanged against the euro, with EUR/USD inching up 0.05% to 1.2819.

The euro remained supported ahead of a meeting of euro zone finance ministers to discuss whether Greece can receive its next installment of bailout funds.

The single currency touched session lows against the greenback earlier after ratings agency Moody’s downgraded France by one notch to Aa1 from Aaa with a negative outlook overnight, citing a deteriorating growth outlook for the euro zone’s second-largest economy.

Elsewhere in the euro zone, Spain successfully auctioned EUR5 billion of short term government bonds at lower borrowing costs, easing pressure on the country to request a bailout.

The greenback was slightly lower against the pound, with GBP/USD rising 0.15% to 1.5931.

The greenback was hovering close to a seven-month high against the yen, with USD/JPY easing up 0.13% to 81.51, but was almost unchanged against the Swiss franc, with USD/CHF dipping 0.02% to 0.9397.

The yen remained under pressure amid expectations that elections on December 16 will result in growing political pressure on the Bank of Japan to implement more aggressive monetary easing measures.

The BoJ kept the size of its asset purchase program unchanged at JPY91 trillion following its policy-setting meeting on Tuesday, in a widely expected decision, after easing policy in September and October.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching down 0.02% to 0.9961, AUD/USD sliding 0.21% to 1.0390 and NZD/USD down 0.40% to 0.8166.

Earlier Tuesday, the minutes of the Reserve Bank of Australia’s November 6 policy meeting indicated that it may cut interest rates further next month, saying “further easing may be appropriate in the period ahead”.

Demand for the Australian dollar continued to be underpinned after the International Monetary Fund late Monday that it is looking at classifying it and the Canadian dollar in its official currency reserves.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.02% to 80.90.

Later Tuesday, the U.S. was to publish official data on building permits and housing starts, while Federal Reserve Chairman Ben Bernanke was to speak at an event in New York.



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