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Forex - Dollar broadly higher as euro zone concerns persist

Published 11/16/2011, 05:01 AM
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Investing.com - The U.S. dollar remained broadly higher against its major counterparts on Wednesday, as uncertainty over the ongoing debt crisis in the euro zone weighed but the euro found support as the European Central Bank bought Spanish and Italian debt.

During European morning trade, the dollar was slightly higher against the euro, with EUR/USD slipping 0.12% to hit 1.3523.

The euro found support as Italian government borrowing costs eased back below the 7% threshold, a level widely viewed as unsustainable in the long term, while Spanish 10-year yields also eased off Tuesday’s three month high.

Later Wednesday, incoming Italian Prime Minister Mario Monti was due to meet with President Giorgio Napolitano to officially accept the post and present his new government.

Meanwhile, official data showed that the rate of consumer inflation in the euro zone remained unchanged at 3% in October, in line with expectations.

The greenback was also up against the pound, with GBP/USD shedding 0.37% to hit 1.5765.

In the U.K., official data showed that the unemployment rate jumped to a 15-year high of 8.3%, while the number of people without a job on the wider ILO measure rose to a record high.

The report said the number of people claiming jobless benefit rose by 5,300 last month, far below analysts' forecasts of a rise of 20,400.

Elsewhere, the greenback was lower against the yen but inched higher against the Swiss franc, with USD/JPY slipping 0.15% to hit 76.91, and USD/CHF easing up 0.09% to hit 0.9158.

Earlier Wednesday, the Bank of Japan left interest rates unchanged and cut its economic outlook amid uncertainty over the global economic outlook and the deepening debt crisis in the euro zone.

The bank also said that it may implement new stimulus measures if the yen resumes gains after climbing to postwar highs against the greenback last month.

The greenback was also higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.26% to hit 1.0237, AUD/USD shedding 0.30% to hit 1.0146 and NZD/USD sliding 0.15% to hit 0.7702.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% to hit 78.17.

Later in the day, the U.S. was to release official data on consumer price inflation and industrial production.


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