Forex - U.S. dollar gains ground on safety flight

Published 01/05/2012, 02:33 PM
Updated 01/05/2012, 02:36 PM
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Investing.com - The U.S. dollar advanced against its major counterparts on Thursday, as euro zone debt crisis fears caused investors to sell higher yielding riskier assets and seek the relative safety of the greenback.  

During mid session U.S. trade, the greenback traded higher against the euro, with EUR/USD falling 1.15% to hit 1.2791.  

The single currency was depressed by a combination of Italy's UniCredit selling stock to increase capital, a French bond auction resulting in higher yields, and overnight European Central Bank deposits hitting all time highs.  

Dollar bullish news from the U.S. included a surprisingly positive payroll report from ADP, thought of as a precursor to the official data on Friday, and dropping unemployment numbers, all supporting the dollar's rally.  

The U.S. dollar was up against the pound, with GBP/USD falling 0.78% to hit 1.5498.  

In other news, Japanese official stated that Japan will continue to closely monitor moves in the Forex market in response to last years U.S. criticism of currency market intervention by the nation.  

Meanwhile, The Institute for Supply Management stated that its non manufacturing purchasing managers index only climbed 0.6 points in December, missing analysts estimates of 1.0 points.  

The greenback was higher against the yen and Swiss franc with USD/JPY up by 0.58% to 77.17 and USD/CHF soaring 1.18% to hit 0.9528.  

In addition the greenback was higher against its Canadian,  Australian and New Zealand cousins with USD/CAD climbing  0.55% to hit 1.0185, AUD/USD dropping 0.98% to hit 1.0266 and NZD/USD giving back 0.77% to 0.7816.  

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, surged 1.07% to hit 81.23.  

Investors are anxiously awaiting the official payroll numbers from the U.S. and a euro zone retail sales report on Friday.







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