Forex - Dollar remains higher as Greece concerns linger

Published 02/06/2012, 10:54 AM
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Investing.com - The U.S. dollar remained higher against its major counterparts on Monday, as Greece failed to meet another deadline to strike a deal on a much needed EUR130 billion bailout, pushing the country closer to a default. 

During U.S. morning trade, the dollar was higher against the euro, with EUR/USD dropping 0.66% to hit 1.3071.

Investors remained jittery amid concerns over repeated delays in talks between Greek Prime Minister Lucas Papademos and coalition party leaders to discuss whether they can agree to conditions to meet the requirements for a EUR130 billion aid package.

A European Commission spokesman said earlier that Greece needed urgently to take decisions, while French and German leaders warned the country that time was running out.

German Chancellor Angela Merkel also insisted that Greece must decide whether it remains in the euro zone.

The euro found some support earlier following official data showing that German factory orders rose more-than-expected in December, on the back of increased demand from outside the euro zone, easing concerns over a slowdown in the region’s largest economy.

The greenback was also higher against the pound, with GBP/USD declining 0.19% to hit 1.5783.

In the U.K., a report by mortgage lender Halifax showed that house prices rose by 0.6% in January, after dropping by a revised 1% the previous month.

The report said that continuing low levels of interest rates have helped support housing demand.

The greenback was almost unchanged against the yen but posted steep gains against the Swiss franc, with USD/JPY inching up 0.01% to hit 76.61 and USD/CHF rising 0.56% to hit 0.9232.

In addition, the greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.33% to hit 0.9968, AUD/USD falling 0.48% to hit 1.0718 and NZD/USD losing 0.44% to hit 0.8323.

In a report, the Richard Ivey School of Business said earlier that its purchasing managers’ index for Canada jumped to 64.1 in January from 63.5 the previous month. Analysts had expected a reading of 57.8 in January.

In Australia, data showed that retail sales fell for the first time in six months in December, ticking down 0.1%, confounding expectations for a 0.2% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.51% to hit 79.45.

Also Monday, the International Monetary Fund said that its forecast for economic growth in China of 8.2% this year could be cut almost in half if the debt crisis in the euro zone worsens, a scenario the IMF says would warrant “significant” fiscal stimulus from the nation’s government.


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