Investing.com - The dollar strengthened against the world's major global currencies on Tuesday after Moody's stripped France of its triple-A rating, which wiped out appetite for risk.
The market kept an eye on the Bank of Japan, which was holding a monetary policy meeting later Tuesday.
In Asian trading on Tuesday, EUR/USD was down 0.21% at 1.2787
Moody's Investors Service earlier said it had cut French sovereign ratings to Aaa1 from Aaa, which sent investors ditching the single currency and commodities to digest the news, which made the dollar the perfect safe haven.
"France's long-term economic growth outlook is negatively affected by multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labor, goods and service markets," the ratings agency said in a release.
"France's fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand, and in the longer term due to the structural rigidities noted above."
The country is also less cushioned from external shocks than in the past, Moody's added.
The dollar softened earlier on solid housing data that sparked demand for higher-yielding asset classes.
U.S. existing home sales beat expectations in October, while September's figure was revised down, industry data showed on Monday.
In a report, the National Association of Realtors said that existing home sales rose by 2.1% to a seasonally adjusted 4.79 million units in October from September’s revised total of 4.69 million. September existing home sales were initially reported at 4.75 million units.
Analysts had expected U.S. existing home sales to rise to 4.75 million units in October.
The risk-on session quickly came to an end by Asian trading on Tuesday on news that Moody's had downgraded France.
Meanwhile, the greenback was flat against the pound, with GBP/USD trading down 0.01% at 1.5907.
The dollar was down against the yen, with USD/JPY trading down 0.26% at 81.20 and up against the Swiss franc, with USD/CHF trading up 0.20% at 0.9419.
The Bank of Japan is holding a monetary policy meeting later in the day and investors were keeping an out for policy changes.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.03% at 0.9966, AUD/USD down 0.05% at 1.0407 and NZD/USD trading down 0.16% at 0.8186.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13% at 80.99.
Later Tuesday, the U.S. is to publish official data on building permits as well as data on housing starts.
The market kept an eye on the Bank of Japan, which was holding a monetary policy meeting later Tuesday.
In Asian trading on Tuesday, EUR/USD was down 0.21% at 1.2787
Moody's Investors Service earlier said it had cut French sovereign ratings to Aaa1 from Aaa, which sent investors ditching the single currency and commodities to digest the news, which made the dollar the perfect safe haven.
"France's long-term economic growth outlook is negatively affected by multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labor, goods and service markets," the ratings agency said in a release.
"France's fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand, and in the longer term due to the structural rigidities noted above."
The country is also less cushioned from external shocks than in the past, Moody's added.
The dollar softened earlier on solid housing data that sparked demand for higher-yielding asset classes.
U.S. existing home sales beat expectations in October, while September's figure was revised down, industry data showed on Monday.
In a report, the National Association of Realtors said that existing home sales rose by 2.1% to a seasonally adjusted 4.79 million units in October from September’s revised total of 4.69 million. September existing home sales were initially reported at 4.75 million units.
Analysts had expected U.S. existing home sales to rise to 4.75 million units in October.
The risk-on session quickly came to an end by Asian trading on Tuesday on news that Moody's had downgraded France.
Meanwhile, the greenback was flat against the pound, with GBP/USD trading down 0.01% at 1.5907.
The dollar was down against the yen, with USD/JPY trading down 0.26% at 81.20 and up against the Swiss franc, with USD/CHF trading up 0.20% at 0.9419.
The Bank of Japan is holding a monetary policy meeting later in the day and investors were keeping an out for policy changes.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.03% at 0.9966, AUD/USD down 0.05% at 1.0407 and NZD/USD trading down 0.16% at 0.8186.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13% at 80.99.
Later Tuesday, the U.S. is to publish official data on building permits as well as data on housing starts.