Forex - Dollar dips on profit-taking, euro gains

Published 03/04/2012, 09:57 PM
Updated 03/04/2012, 10:02 PM
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Investing.com - The dollar fell against the world's major currencies Monday largely due to profit taking although the greenback was choppy against the euro on fears that retail sales due out of Europe will disappoint as will Friday's jobs report in the U.S.

In Asian trading on Monday, the euro was up against the greenback, with EUR/USD gaining 0.04% and trading at 1.3204.

In the U.S. last week, Fed Chairman Ben Bernanke told lawmakers the U.S. central bank has no concrete plans to roll out a third round of quantitative easing, which are asset purchases from banks designed to lower interest rates and stimulate the economy.

As a side effect of quantitative easing, the dollar weakens, but when Bernanke said the Fed had no immediate plans for such action, the dollar rebounded in recent sessions, although profit-taking kicked in Monday.

The euro had fallen in recent sessions, especially on reports that German retail sales fell by 1.6% in January, worse than expectations for 0.5% increase.

Meanwhile the Spanish government upped its budget deficit target to 5.8% of gross domestic product for 2012 from a previous target of 4.4%.

Plus the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, which weakened the currency.

On Monday, investors were buying and selling dollars awaiting a key jobs report due out on Friday, while expectations that eurozone retails sales, due out later Monday, could disappoint made for choppy trading.

The euro jumped in and out of positive territory early in the session before deciding to trade higher against the greenback.

Meanwhile, the dollar was up against the pound, with Cable down 0.08% and trading at 1.5821.

The greenback was down 0.09% against the yen, with USD/JPY trading at 81.73, and down against the Swiss franc, with USD/CHF down 0.07% and trading at 0.9134.

The greenback was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 0.9894, AUD/USD down 0.08% at 1.0723 and NZD/USD up 0.01% at 0.8292.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 79.45.

Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.





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