Forex - Dollar slides as euro pushes higher ahead of meeting

Published 01/09/2012, 07:53 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Monday, as the euro regained ground ahead of a meeting of French and German leaders later in the day, but sentiment on the currency remained fragile amid concerns over the deepening sovereign debt crisis in the euro zone.

During European early afternoon trade, the dollar was lower against the euro, with EUR/USD adding 0.26% to hit 1.2751.

German Chancellor Angela Merkel and French President Nicolas Sarkozy were to meet later Monday, to discuss proposals to tighten coordination of fiscal policy in the single currency bloc.

Risk appetite was also buoyed after official data showed that German exports jumped 2.5% in November; unexpectedly increasing the trade surplus and easing concerns over a slowdown in Europe’s largest economy.

But a separate report showed that German industrial production fell more-than-expected in November, dropping for the third time in the last four months.

Meanwhile, concerns over the ability of troubled euro zone nations to fulfill their sovereign funding needs continued to weigh, ahead of government debt auctions by Spain and Italy later in the week.

The greenback was also lower against the pound, with GBP/USD rising 0.21% to hit 1.5457.

In addition, the greenback was down against the yen and the Swiss franc, with USD/JPY declining 0.11% to hit 76.86 and USD/CHF shedding 0.36% to hit 0.9514.

Earlier Monday, official data showed that Swiss retail sales rose significantly more-than-expected in November, advancing at an annualized rate of 1.8%, blowing past expectations for a 0.5% gain.

The greenback was broadly weaker against its counterparts in Canada and New Zealand but inched higher against the Australian dollar, with USD/CAD slipping 0.10% to hit 1.0272, NZD/USD advancing 0.67% to hit 0.7858 and AUD/USD dipping 0.07% to hit 1.0218.

The Australian dollar remained under pressure after official data showed earlier that domestic retail sales were unexpectedly flat in November after a 0.2% rise the previous month, disappointing expectations for a 0.4% gain.

Separately, official data showed that New Zealand’s trade deficit widened more-than-expected in November

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.20% to hit 81.45.

Also Monday, a report showed that investor confidence in the euro zone improved more-than-expected this month, but remained in negative territory for the sixth consecutive month.


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