Forex - U.S. dollar higher on weak euro data, Greek fears

Investing.com - The U.S. dollar traded higher against its counterparts Wednesday, as global growth worries and the ongoing debt crisis in the euro zone supported safe haven demand for the greenback.

During U.S. afternoon trade, the euro was fractionally higher against the dollar, with EUR/USD dipping 0.13% to hit 1.3251.

Investors remained jittery amid sustained concerns over whether a second EUR130 billion bailout for Greece will be enough to resolve the country’s fiscal woes as the economic situation continues to deteriorate.

Earlier Wednesday, ratings agency Fitch cut Greece’s credit rating to C from CCC and reiterated that a bond-swap agreement with private creditors would be a restricted default.

Fitch said it would review its stance on Greece again once the debt swap had been completed.

Meanwhile, preliminary data showed that manufacturing activity in the euro zone improved less-than-expected in February, remaining in contraction territory for the seventh consecutive month, while service sector activity contracted unexpectedly.

Data from Germany and France showed modest growth in business activity, albeit at a slower pace than in January, but activity other euro zone nation’s showed a steep decline in February.

In euro bullish news, a separate report showed that new euro zone industrial orders increased by 1.8% in December, erasing the previous month’s 1.1% drop.

The greenback was higher against the pound, with GBP/USD giving back 0.68% to hit 1.5672..

Sterling weakened  after the minutes of the Bank of England’s February meeting showed that two policymakers supported a GBP75 billion increase to the bank’s asset purchase program this month, while the remainder of the monetary policy committee voted in favor of a GBP50 billion increase to GBP325 billion.

The greenback was higher against the yen but slipped lower against the Swiss franc, with USD/JPY climbing 0.72% to hit 80.32 and USD/CHF falling 0.26% to hit 0.9102.

The yen has remained under pressure since last week’s decision by the Bank of Japan to implement fresh monetary easing measures to insulate the economy from the effects of the strong yen.

Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.25% to hit 0.9994, AUD/USD falling 0.14% to hit 1.0647 and NZD/USD falling 0.71% to hit 0.8276.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gained 0.16% to hit 79.29.

In the U.S., a report by the National Association of Realtors showed that existing home sales rose by 4.3% to a seasonally adjusted 4.57 million units in January, disappointing expectations for a gain of 6.2% to 4.67 million units.