Forex - Dollar remains lower vs. rivals, eyes on Greek bailout

Published 02/13/2012, 10:51 AM
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Investing.com - The U.S. dollar remained lower against its major counterparts on Monday, as the approval by Greek lawmakers of a new austerity plan supported demand for riskier assets ahead of a key meeting of European ministers later in the week.

During U.S. morning trade, the dollar was down against the euro, with EUR/USD rising 0.11% to hit 1.3212.

The euro found support earlier as concerns over a Greek default eased after the country’s parliament voted a package of wage, pension and job cuts in order to help secure its second bailout package ahead of a March bond redemption.

Euro zone finance ministers are scheduled to meet on Wednesday to discuss the approval of Greece’s financial aid. However, Athens is expected to explain how EUR325 million of this year's total budget cuts will be achieved before the ministers agree to the 130 billion euro bailout.

While German Chancellor welcomed Sunday’s vote, saying it shows “the will and the readiness of the Greeks to undertake major efforts of their own,” Finance Minister Wolfgang Schaeuble said that Greek promises on austerity measures were no longer good enough because so many vows had been broken.

The greenback was also lower against the pound, with GBP/USD adding 0.20% to hit 1.5785.

The greenback was lower against yen and the Swiss franc, with USD/JPY falling 0.24% to hit 77.43 and USD/CHF shedding 0.19% to hit 0.9147.

Official data showed earlier that Switzerland's producer price index was unexpectedly flat in January, after advancing for the first time in eight months in the preceding month, confounding expectations for a 0.2% increase.

Also Monday, preliminary data showed that Japan’s gross domestic product fell more-than-expected in the fourth quarter, ticking down 0.6% after a 1.4% rise the previous quarter.

Analysts had expected Japan’s GDP to fall 0.3% in the fourth quarter.

A separate report showed that Japanese tertiary industry activity rose more-than-expected in December, adding 1.4% after a 0.6% decline the previous month, surpassing expectations for a 0.9% rise.

Elsewhere, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.05% to hit 1.0008, AUD/USD climbing 0.52% to hit 1.0728 and NZD/USD jumping 0.85% to hit 0.8336.

In Australia, official data showed earlier that home loans rose more-than-expected in December, climbing 2.3% after a 1.8% rise the previous month.

Analysts had expected home loans to rise 1.9% in December.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.12% to hit 79.01.

Later in the day, U.S. President Barack Obama was to present his annual budget, including a USD4 trillion plan to create jobs while narrowing the federal budget deficit.


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