U.S.dollar slightly higher on Spanish fears

Investing.com - The U.S. dollar was trading slightly higher  against its major counterparts Friday, as fears that Spain may be losing access to capital markets overshadowed euro zone joint bond hopes,  sending investors into the safety of the greenback.

During U.S. morning trade, the EUR/USD gave back 0.09% to hit 1.2523.

The shared currency gave back earlier gains after Catalan President Artur Mas repeated his call for Spanish central government to help regions access funding at briefing with reporters today in Madrid.

The euro traded at almost its lowest level since July 2010 after a Greek opinion poll showed an anti- bailout party gaining support before June 17 elections. Providing support to the euro, Italian Prime Minister Mario Monti stated, during a television interview, “Europe can have euro bonds soon. Germany has an interest in ensuring no country leaves the euro, while Greece will probably remain in the 17 – nation currency region even as anything can happen.” 

The EU summit ended yesterday with a plea to Greek voters to elect a pro - austerity governement on June 17 in order to keep the troubled island nation in the euro zone.

However, German Chancellor Angela Merkel left open a potential compromise on debt sharing via joint nation bonds in the euro area lifting hopes of cooperation.

Euro area finance ministers do not plan on meeting again until after the Greek elections next month, which potentially will determine Greek’s future in the euro zone. The Greek June election was called after a May 6 vote left no party able to form a government, as voter sent the anti-bailout Syriza party to second place.


The greenback traded lower against the pound, with GBP/USD adding 0.06% to hit 1.5678.

Earlier in the week, data from the U.K. showed that the economy contracted by 0.3% in the three months to March, more than preliminary estimate for a 0.2% contraction, driven by the sharpest quarterly contraction in construction since the first quarter of 2009.

Elsewhere, the greenback was marginally lower against the yen, with USD/JPY down 0.03% to hit 79.57, and pushed higher against the Swiss franc, with USD/CHF adding 0.20% to hit 0.9581..

The greenback was  higher against its Canadian, yet lower against Australian and New Zealand, with USD/CAD ahead by 0.03% to hit 1.0272, AUD/USD gaining 0.17% to hit 0.9780 and NZD/USD rising 0.42% to hit 0.7576.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.08% to trade at 82.37.