Forex - Dollar mixed to higher amid Greek debt uncertainty

Published 01/24/2012, 04:44 AM
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Investing.com - The U.S. dollar was mixed to higher against its major counterparts on Tuesday, as markets were jittery after European finance minister rejected an offer by private creditors to help restructure Greece’s sovereign debt.

During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.19% to hit 1.3037.

Following a meeting in Brussels, euro zone ministers called on private bond holders to drop demands that new bonds to be issued in exchange for their existing Greek bonds will carry an interest rate of 4%.

Greece stated that it was not willing to pay a rate of more than 3.5%, a position which the European Union and the International Monetary Fund supports.

But the euro found support after preliminary data showed that manufacturing activity in the single currency bloc rose at the fastest pace since August this month, easing concerns over the impact of the region’s debt crisis on the economy.

Meanwhile, service sector activity in the euro zone accelerated to a five-month high in January.

The greenback was higher against the pound, with GBP/USD declining 0.17% to hit 1.5541.

Official data showed earlier that public sector net borrowing in the U.K declined more-than-expected in December, falling to GBP10.8 billion from GBP 15.1 billion the previous month.

Analysts had expected public sector net borrowing to decline to GBP12.4 billion in December.

The greenback was higher against the yen but lower against the Swiss franc, with USD/JPY adding 0.35% to hit 77.29 and USD/CHF retreating 0.22% to hit 0.9255.

Earlier Tuesday, the Bank of Japan left its interest rate close to zero and its monetary policy unchanged for the third month in a row, but reduced its growth forecasts for the current and coming fiscal years.

The bank also cited the euro zone’s sovereign debt crisis as a key factor that could pose downside risks for the global economy.

Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD gaining 0.11% to hit 1.0010, AUD/USD dropping 0.34% to hit 1.0487 and NZD/USD declining 0.08% to hit 0.8093.

In Australia, the Conference Board said in a report earlier that its leading index declined 0.3% in November after a 0.5% rise the previous month.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged 0.03% higher, to hit 79.92.

EU finance ministers were to hold discussions in Brussels throughout the day.


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