Forex - Dollar broadly higher vs. rivals as contagion fears dent risk

Published 11/29/2010, 10:43 AM
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Investing.com – The U.S. dollar was broadly higher against its major rivals on Monday, as risk aversion dominated market sentiment, spurring demand for the U.S. dollar as a safe haven.

During European afternoon trade, the greenback was sharply higher against the euro, with EUR/USD plunging 1.09% to hit 1.3095.

Concerns centered on speculation that the rescue fund created by the International Monetary Fund and the European Union could run out if either Spain or Portugal followed Ireland and requested assistance.

Elsewhere, the greenback was up against the pound with GBP/USD dropping 0.31% to hit 1.5543. Earlier in the day, official data showed that net lending to individuals in the U.K. rose more-than-expected in October, while mortgage approvals fell to their lowest level since February.

Meanwhile, the greenback was up against the yen but down against the Swiss franc, with USD/JPY climbing 0.27% to hit 84.30 and USD/CHF shedding 0.06% to hit 1.0026.

Earlier Monday, official data showed that Japan’s retail sales fell significantly more-than-expected in October after a stimulus program ended and tobacco tax was increased.

Elsewhere, the greenback was up against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.21% to hit 1.0236, AUD/USD shedding 0.52% to hit 0.9597 and NZD/USD tumbling 0.68% to hit 0.7447.

Also Monday, official data showed that New Zealand’s trade deficit narrowed significantly more-than-expected in October, while separate data showed that Canadian producer prices and raw materials prices rose more-than-expected in October.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.79%.

Also Monday, the European Commission said that the euro zone’s economy will slow slightly next year as governments cut spending to win back financial market confidence, but private demand will give growth a fresh boost in 2012.

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