Dollar trims losses on Ireland vote, U.S. data

Published 02/28/2012, 10:42 AM
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Investing.com - The U.S. dollar trimmed losses against its major counterparts on Tuesday, as reports that Ireland is to hold a referendum on the new European Union fiscal treaty and mixed U.S. data dented market sentiment.

During U.S. morning trade, the dollar was lower against the euro, with EUR/USD up 0.13% to hit 1.3415, off an earlier session high of 1.3462.

The euro trimmed gains after Ireland’s prime minister confirmed that the country is to hold a referendum on the European Fiscal Compact Treaty, which proposes harsh new budgetary discipline on each euro zone state, including near-zero public deficits.

The euro had briefly dipped against the greenback earlier, after data painted a mixed picture of the economic recovery in the U.S.

The Conference Board said that its index of U.S. consumer confidence jumped to a 12-month high this month, rising to 70.8 from a reading of 61.5 in January and far outstripping expectations for a gain to 63.0.

Meanwhile, the Commerce Department said U.S. orders for long lasting manufactured goods fell by the most in three years in January.

Durable goods orders dropped 4.0% after rising by 2.1% in December, far worse than forecasts for a 0.8% decline, while core durable goods orders, which excludes transportation items, tumbled by a seasonally adjusted 3.2% in January, confounding expectations for a flat reading.

A separate report showed that U.S. home prices fell more-than-expected in December, declining for the 18th consecutive month.

But sentiment on the single currency remained supported as investors looked ahead to Wednesday's launch of the European Central Bank’s second three-year long-term refinancing operation, after a similar cash injection in December averted a credit crunch and eased pressure on peripheral euro zone bond markets.

The greenback was fractionally lower against the pound, with GBP/USD inching up 0.02% to hit 1.5828.

Earlier Tuesday, the Confederation of British Industry reported that retail sale volumes in the U.K. improved significantly this month, after tumbling to the lowest level since March 2009 in January.

The greenback edged higher against the yen but slipped against the Swiss franc, with USD/JPY inching up 0.05% to hit 80.64 and USD/CHF sliding 0.09% to hit 0.8983.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.27% to hit 0.9962, AUD/USD dipping 0.02% to hit 1.0756 and NZD/USD shedding 0.53% to hit 0.8366.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, lost 0.12% to hit 78.51.

Also Tuesday, Portugal’s finance minister said his country had passed the third review of its EUR78 billion bailout by the troika, which is composed of the ECB, EU and International Monetary Fund, and added that the country’s fiscal targets for 2012 would be met in spite of deteriorating domestic economic conditions.


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