Forex - Dollar modestly higher as euro woes hit risk appetite

Published 09/20/2011, 04:43 AM
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Investing.com – The U.S. dollar was modestly higher against almost all of its major counterparts on Tuesday, as ongoing concerns over the financial crisis in the euro zone supported demand for safe haven assets.

During European morning trade, the greenback was up against the euro, with EUR/USD shedding 0.17% to hit 1.3662.

Sentiment on the single currency suffered a fresh blow after Standard & Poor’s downgraded its debt rating on Italy by one notch, citing weak economic growth and increasing political difficulties.

Meanwhile, talks to discuss whether Greece has done enough to access its next tranche of bailout funds ended Monday without reaching an agreement. Greece’s finance minister said the discussions would continue late Tuesday, adding that some work still needed to be done.

The greenback was also higher against the pound, with GBP/USD dipping 0.05% to hit 1.5696.

Elsewhere, the greenback dipped against the yen but edged higher against the Swiss franc, with USD/JPY slipping 0.05% to hit 76.55 and USD/CHF inching up 0.04% to hit 0.8823.

The yen remained largely unchanged earlier after Japan unveiled a series of measures to soften the impact of the surging yen on the country’s largely export driven economy. The government also said it expects the Bank of Japan to take “appropriate and bold” measures to support the economy when needed.

In Switzerland, official data showed that the country’s trade surplus narrowed more-than-expected in August, as the strong Swiss franc weighed on exports.

Meanwhile, the greenback was higher against its Canadian and New Zealand cousins but weakened against its Australian counterpart, with USD/CAD easing up 0.06% to hit 0.9913, NZD/USD shedding 0.40% to hit 0.8216 and AUD/USD rising 0.20% to hit 1.0241.

The minutes of the Reserve Bank of Australia’s September policy meeting released earlier showed that policymakers believed it was better to keep rates steady in the light of uncertainty over the global outlook, easing concerns over possible rate cuts by the central bank.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.06% to hit 77.63.

Later in the day, the U.S. was to publish government data on building permits and housing starts.

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