Forex - Dollar lower vs. rivals amid Greece uncertainty

Published 11/03/2011, 11:44 AM
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Investing.com - The U.S. dollar was lower against its major counterparts on Thursday, after downbeat comments by European Central Bank President Mario Draghi and amid ongoing uncertainty over political instability in Greece.

During U.S. morning trade, the dollar was almost unchanged against the euro, with EUR/USD easing up 0.01% to hit 1.3743.

The single currency remained supported as Greece's controversial referendum on the country's bailout program was likely to be canceled due to a potential government collapse.

Earlier in the day, the ECB lowered its interest rate to 1.25% from 1.50% as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.

Speaking at the bank’s post policy meeting press conference, new president Mario Draghi said ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”

"What we are observing now is ... slow growth heading towards a mild recession by year end," he said.

Meanwhile, the greenback was also down against the pound, with GBP/USD climbing 0.24% to hit 1.5987.

A report showed earlier that activity in the U.K. service sector moderated in October but growth remained above the level that separates expansion from contraction for the tenth successive month.

The greenback was slightly lower against the yen and the Swiss franc, with USD/JPY declining 0.08% to hit 77.98, and USD/CHF easing down 0.12% to hit 0.8830.

Elsewhere, the greenback was also down against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching down 0.06% to hit 1.0128, AUD/USD advancing 0.03% to hit 1.0352 and NZD/USD rising 0.02% to hit 0.7895.

Earlier in the day, the Institute of Supply Management said that its non-manufacturing purchasing managers' index fell unexpectedly in October, ticking down to 52.9 after a reading at 53.0 the previous month.

Analysts had expected the index to rise to 53.7 in October.

In a separate report, the U.S. Department of Labor said that initial jobless claims rose less-than-expected last week.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.11% to hit 77.21.

Also Thursday, leaders from the G-20 group of nations were meeting in Cannes to discuss a range of issues, including the implications of a Greek default or possible euro zone exit.

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