Forex - Greenback climbs on flight to safety from Spanish woes

by
Forexpros - The U.S. dollar traded mostly higher against its major counterparts Tuesday, despite the release of bearish U.S. data as concerns over elevated Spanish borrowing costs and the country's fragile banking sent investors into the safety of the greenback.

During U.S. afternoon trade, the dollar was hovering close an almost two-year high against the euro, with EUR/USD falling 0.47% striking 1.2483.

Sentiment on the euro remained weak amid concerns over the situation in Spain, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.

Earlier Tuesday, Spain's Treasury auctioned EUR8.5 billion of six-month bonds at an average yield of 2.10%, a six-month high, up from 1.77% at a similar auction last month.

The yield on Spanish 10-year bonds rose to 6.48% following the auction, hovering just below the 2012 high of 6.50% hit Monday after the government announced that it was to recapitalize one of the country's largest commercial lenders.

The greenback traded higher against the pound, with GBP/USD giving back 0.34% to hit 1.5628.

Elsewhere, the greenback traded lower against the yen but higher against the Swiss franc, with USD/JPY giving back 0.02% to hit 79.45 and USD/CHF surging 0.44% to hit 0.9626.

Elsewhere, the greenback was marginally higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD gaining 0.23% to hit 1.0261, AUD/USD falling 0.42% to hit 0.9812 and NZD/USD giving back 0.24% to hit 0.7601.

The commodity linked dollars found support after Chinese media reports fuelled speculation that Beijing may soon launch an economic stimulus program, to counter signs of a slowdown in growth in the world's second largest economy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gained 0.34%, to trade at 82.62.

The greenback was little changed after data showed that the S&P/Case-Shiller U.S. home price index fell at an annualized rate of 2.6% in March, declining for the 21st consecutive month.

A separate report by the Conference Board showed that U.S. consumer confidence declined unexpectedly in May.




&nbForexpros
Forexpros
Tags:

0 Comments

Join In on this conversation, post a comment below.
No comments yet... Be the first to comment.

About the Author

This user has not set a profile description.
Membership is Free. Join Now in less than 5 seconds! Alternatively Join or Sign In here.