Forex - Dollar firms on waning Iranian fears

Published 01/08/2012, 09:14 PM
Updated 01/08/2012, 09:18 PM
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Investing.com - The dollar continued to strengthen against the world's major currencies on Monday, extending Friday's gains as market watchers viewed Iran's threat to close a key waterway with greater skepticism.

The greenback on Monday was up against the euro, with EUR/USD dropping 0.22% to hit 1.2691.

Healthy economic indicators out of the U.S. bolstered the dollar as well.

On Friday, the Bureau of Labor Statistics reported that the U.S. economy added a net 200,000 jobs to the economy, well above expectations for a 150,000 gain.

German factory orders slipped 4.8% in November, coming in worse than analyst expectations for a 1.6% decline.

Those indicators prompted demand for the dollar.

On Monday in Asian trading, fears began to subside that Iran will live up to its threats and close off the Strait of Hormuz, which sent the price of oil falling and the dollar rising.

Furthermore, demand for the euro slipped ahead of a key meeting between French President Nicolas Sarkozy and Angela Merkel, who will convene on Jan. 9 to discuss ways to finally firewall and extinguish the debt crisis and get the continent's economy growing again.

Meanwhile, the dollar was stronger against the pound, with Cable falling 0.13% to hit 1.5407.

The greenback was up 0.02% against the yen, with USD/JPY was trading at 76.98, and up against the Swiss franc, with USD/CHF climbing 0.18% at 0.9569.

The greenback was up against its cousins in Canada, Australia and New Zealand, with USD/CAD rising 0.24% at 1.0309, AUD/USD down 0.78% to 1.0149 and NZD/USD down 0.22% at 0.7790.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.18% at 81.76.

Later Monday, markets will await a eurozone report on investor confidence in the currency bloc, as well as data on German industrial output.

Also Monday, Federal Reserve Open Market Committee member Dennis Lockhart is set to speak.

U.S. consumer credit figures will be released while in Europe, traders will keep an eye on Swiss unemployment and retail sales figures.

Also on Monday, data on changes in U.K. home prices will hit the wire as will Chinese trade balance figures.








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