Forex - Dollar up against rivals on U.S. bond yield gains

Published 12/08/2010, 04:11 AM
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Investing.com – The U.S. dollar was up against all of its major counterparts on Wednesday, as a spike in U.S. Treasury yields, following a proposed extension in tax cuts boosted demand for the greenback.

During European morning trade, the greenback was up against the euro, with EUR/USD shedding 0.51% to hit 1.3189.
 
On Tuesday, the Irish austerity budget passed the first in a series of votes to tackle what Finance Minister Brian Lenihan called the “worst crisis in our history.”

The greenback was also up against the pound with GBP/USD dropping 0.35% to hit 1.5701.

Elsewhere, the greenback was up against the yen and the Swiss franc, with USD/JPY surging 0.63% to hit 84.00 and USD/CHF adding 0.20% to hit 0.9895.

Earlier in the day, official data showed that Japanese core machinery orders fell unexpectedly in October, declining for the second straight month.

Meanwhile, the greenback was up against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing up 0.09% to hit 1.0133, AUD/USD shedding 0.49% to hit 0.9779 and NZD/USD plunging 0.99% to hit 0.7493.

Earlier Wednesday, official data showed that the number of Australian new home loan approvals rose significantly more-than-expected in October.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.39%

The decision by U.S. President Barack Obama to extend tax cuts for two years triggered selling of fixed-income securities. The tax cuts could potentially reduce pressure on the Federal Reserve to extend its USD600 billion bond-purchase program, while boosting U.S. growth.

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