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Forex - Dollar remains lower ahead of U.S. data

Published 01/26/2012, 08:10 AM
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Investing.com - The U.S. dollar remained lower against its major counterparts on Thursday, one day after the Federal Reserve pushed back expectations for a likely interest rate increase and hinted at more quantitative easing.

During European afternoon trade, the dollar was down against the euro, with EUR/USD gaining 0.29% to hit 1.3145.

Talks on a debt swap deal between debt strapped Greece and its private creditors were to resume in Athens later in the day.

The euro was boosted by Greek media reports that the country’s creditors were prepared to accept lower interest rates on new bonds to be issued to replace their existing Greek holdings.

On Wednesday, International Monetary Fund Head Christine Lagarde said the European Central Bank and other public sectors holders of Greek debt may also need to accept losses to help ease the country’s massive debt burden.

Elsewhere, Italy successful auctioned EUR5 billion of government debt earlier, in a bond auction which met with solid investor demand at sharply lower yields, ahead of an auction of medium to long term debt on Monday.

The greenback was also lower against the pound, with GBP/USD climbing 0.20% to hit 1.5688.

In the U.K. industry data showed that retail sale volumes dropped to the lowest level since March 2009 this month, with retailers expecting volumes to keep declining in February.

The report came one day after data showing the U.K. economy contracted in the fourth quarter, underlining concerns over fresh monetary easing by the Bank of England.

In addition, the greenback was weaker against the yen and the Swiss franc, with USD/JPY slipping 0.24% to hit 77.59 and USD/CHF shedding 0.35% to hit 0.9182.

Elsewhere, the greenback was down against its Canadian, Australian and New Zealand cousins, with USD/CAD losing 0.30% to hit 1.0012, AUD/USD advancing 0.64% to hit 1.0664 and NZD/USD adding 0.52% to hit 0.8210.

Earlier Thursday, the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.5%, in line with expectations. RBNZ Governor Alan Bollard said it was prudent to hold rates steady amid the present uncertainty over the global economic outlook.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25% to hit 79.40.

Later in the day, the U.S. was to release official data on initial jobless claims and durable goods orders.


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