Investing.com - The U.S. dollar moved higher against its major counterparts on Monday, as Greece failed to reach an agreement with its creditors signaling a potential default.
During late session U.S. trade, the dollar gained ground against the euro, with EUR/USD falling 0.31% to hit 1.3117.
The single currency weakness was triggered by renewed fears that Greece will fail to reach an acceptable deal with its private creditors.
This agreement is critical for Greece to avoid default on March 20 by obtaining its next tranche of bailout funds.
French President Nicolas Sarkozy met with German Chancellor Angela Merkel today in Paris regarding the Greek situation. Merkel stated, “I don’t understand why we need a few more days—time is running out”, adding to the negative sentiment on the session.
However, Greece’s Prime Minister Lucas Papedemos reached a tentative deal with leaders of the three parties supporting his interim government. The agreement is designed to boost economic competitiveness and extend spending cuts.
During a five hour meeting yesterday, the Greek leaders agreed to make additional spending reductions equaling 1.5% of the gross domestic product.
Furthermore, Greek’s largest public and private union groups, ADEDY and GSEE called a twenty four hour general strike to protest the austerity measures.
In additional euro zone bearish news, the International Monetary Fund stated that China’s economic expansion may be cut in half by the euro zone’s debt crisis.
This Chinese crisis would warrant significant fiscal stimulus from the nation’s government. The IMF went on to state that China’s growth would drop as much as four percentage points from the fund’s current projection for an expansion of 8.2% in 2012.
Last week, Morgan Stanley slashed its fourth quarter 2012 euro forecast to USD1.15 from an earlier projection of USD1.20. The investment bank expects government budget controls to result in a region wide recession.
Adding some hope to the euro zone, German factory orders advanced more than expected in December. Demand from outside the euro zone was credited with the increase, easing economic slowdown worries in the region’s largest economy.
The greenback traded lower against the pound, with GBP/USD easing higher by 0.02% to hit 1.5818.
In the U.K., a report by mortgage lender Halifax indicated that home prices climbed by 0.06% in January, after giving back a revised 1% the previous month.
The greenback was lower against the yen and but higher against the Swiss franc with USD/JPY slipping 0.07% to 76.54 and USD/CHF advancing 0.16% to hit 0.9195.
The greenback was higher against its Canadian, Australian and New Zealand counterparts with USD/CAD advancing 0.34% to hit 0.9968, AUD/USD falling 0.43% to hit 1.0724 and NZD/USD dipping 0.38% to 0.8328.
The Canadian Ivey purchasing manager’s report showed a gain to 64.1 in January beating analysts forecast of 57.8.
Retail sales fell for the first time in six months in Australia, ticking down 0.1% missing estimates for a 0.2% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.21% to hit 79.22.
During late session U.S. trade, the dollar gained ground against the euro, with EUR/USD falling 0.31% to hit 1.3117.
The single currency weakness was triggered by renewed fears that Greece will fail to reach an acceptable deal with its private creditors.
This agreement is critical for Greece to avoid default on March 20 by obtaining its next tranche of bailout funds.
French President Nicolas Sarkozy met with German Chancellor Angela Merkel today in Paris regarding the Greek situation. Merkel stated, “I don’t understand why we need a few more days—time is running out”, adding to the negative sentiment on the session.
However, Greece’s Prime Minister Lucas Papedemos reached a tentative deal with leaders of the three parties supporting his interim government. The agreement is designed to boost economic competitiveness and extend spending cuts.
During a five hour meeting yesterday, the Greek leaders agreed to make additional spending reductions equaling 1.5% of the gross domestic product.
Furthermore, Greek’s largest public and private union groups, ADEDY and GSEE called a twenty four hour general strike to protest the austerity measures.
In additional euro zone bearish news, the International Monetary Fund stated that China’s economic expansion may be cut in half by the euro zone’s debt crisis.
This Chinese crisis would warrant significant fiscal stimulus from the nation’s government. The IMF went on to state that China’s growth would drop as much as four percentage points from the fund’s current projection for an expansion of 8.2% in 2012.
Last week, Morgan Stanley slashed its fourth quarter 2012 euro forecast to USD1.15 from an earlier projection of USD1.20. The investment bank expects government budget controls to result in a region wide recession.
Adding some hope to the euro zone, German factory orders advanced more than expected in December. Demand from outside the euro zone was credited with the increase, easing economic slowdown worries in the region’s largest economy.
The greenback traded lower against the pound, with GBP/USD easing higher by 0.02% to hit 1.5818.
In the U.K., a report by mortgage lender Halifax indicated that home prices climbed by 0.06% in January, after giving back a revised 1% the previous month.
The greenback was lower against the yen and but higher against the Swiss franc with USD/JPY slipping 0.07% to 76.54 and USD/CHF advancing 0.16% to hit 0.9195.
The greenback was higher against its Canadian, Australian and New Zealand counterparts with USD/CAD advancing 0.34% to hit 0.9968, AUD/USD falling 0.43% to hit 1.0724 and NZD/USD dipping 0.38% to 0.8328.
The Canadian Ivey purchasing manager’s report showed a gain to 64.1 in January beating analysts forecast of 57.8.
Retail sales fell for the first time in six months in Australia, ticking down 0.1% missing estimates for a 0.2% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.21% to hit 79.22.