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Forex - Dollar higher vs. rivals as euro falls on Greece fears

Published 09/19/2011, 04:46 AM
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Investing.com – The U.S. dollar was higher against all of its major counterparts on Monday, as the euro weakened broadly after a weekend meeting of European finance ministers failed to make progress on resolving the region’s financial crisis.

During European morning trade, the greenback was sharply higher against the euro, with EUR/USD tumbling 0.93% to hit 1.3670.

Concerns over a possible default by Greece escalated after European Union finance ministers warned that they may withhold Greece’s next tranche of bailout aid if Athens fails to meet deficit reduction targets.

The greenback was also lower against the pound, with GBP/USD shedding 0.38% to hit 1.5731.

Earlier Monday, the Bank of England’s quarterly bulletin said the bond-purchase plan it implemented between March 2009 and early 2010 had an “economically significant” effect on Britain’s financial system, but said the impact of future purchases may differ.

The greenback was also up against the yen and the Swiss franc, with USD/JPY inching up 0.10% to hit 76.87 and USD/CHF advancing 0.78% to hit 0.8825.

In addition, the greenback was stronger against its Canadian, Australian and New Zealand cousins, with USD/CAD climbing 0.46% to hit 0.9824, AUD/USD falling 1.13% to hit 1.0244 and NZD/USD shedding 0.67% to hit 0.8233.

Earlier in the day, a report showed that the New Zealand’s Westpac index of consumer sentiment was unchanged at 112 in the September quarter, as consumers remained upbeat, but long term confidence dropped off.

Meanwhile, the Australian dollar was weighed by speculation over a possible rate cut by the country’s central bank, ahead of the release of minutes from this month’s policy-setting meeting on Tuesday.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, surged 0.76% to hit 77.64.

Later in the day, officials from the EU and the International Monetary Fund were to hold talks with Greek Finance Minister Evangelos Venizelos to discuss extra steps to ensure Athens can qualify for its next tranche of rescue funds.

Also Monday, U.S. President Barack Obama was to speak about the economy, in Washington.

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