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Forex – Dollar, yen, Swiss franc gain as risk aversion sharpens

Published 07/18/2011, 04:45 AM
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Investing.com – The U.S. dollar was broadly higher against most of its major counterparts on Monday, as fears over a potential U.S. sovereign debt default and ongoing concerns over the euro zone’s debt crisis saw risk aversion sharpen.

During European morning trade, the greenback was up against the euro, with EUR/USD slumped 0.71% to hit a three-day low of 1.4055.

Euro zone finance ministers were to meet Thursday to focus on “the financial stability of the euro area as a whole and the future financing of the Greek program,” according to the president of the European Council, Herman Van Rompuy.

The greenback was also higher against the pound, with GBP/USD shedding 0.3% to hit 1.6084.

Elsewhere, the greenback edged lower against the safe haven yen and Swiss franc, with USD/JPY easing down 0.1% to hit 79.05 and USD/CHF dipping 0.13% to hit 0.8142.

With markets in Tokyo closed in observance of Marine Day, trading volumes were low, resulting in quiet trade.

Meanwhile, the greenback advanced against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 0.47% to hit 0.9583, AUD/USD slipping 0.3% to hit 1.0621 and NZD/USD easing down 0.04% to hit 0.8453.

Earlier in the day, Statistics New Zealand said in a report that consumer price inflation rose 1.0% in the second quarter of 2011, above expectations for a 0.8% gain.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.63% to trade at a four-day high of 75.88.

U.S. President Barack Obama said over the weekend that the U.S. government was “running out of time” in regards to negotiations over lifting the country’s USD14.3 trillion debt ceiling before an August 2 deadline.

Ratings agencies Moody’s and Standard & Poor’s both warned last week that a failure to raise the debt limit in time would result in a downgrade in the credit rating of the world’s largest economy.

Later in the day, the U.S. was to publish a government report on the balance of domestic and foreign investments.

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