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Dollar broadly lower vs. rivals amid EU optimism

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Forexpros - The U.S. dollar was broadly lower against its major counterparts on Tuesday, as investors eyed a series of highly anticipated euro zone meetings throughout the week, amid growing hopes for fresh action to tackle the region's debt crisis.

During European morning trade, the dollar was lower against the euro, with EUR/USD climbing 0.50% to 1.2406.

The euro rose to a 2-week high against the greenback after the German member of the European Central Bank's Executive Board, J?rg Asmussen, indicated that he would support the bond purchasing program proposed by ECB head Mario Draghi, in spite of warnings from Germany's central bank.

In its monthly report on Monday, Germany's Bundesbank reiterated its opposition to the ECB's plan to embark on "unlimited" government bond purchases.

The ECB dismissed reports Monday that it may set a cap on peripheral euro zone bond yields, saying it was "absolutely misleading" to report on decisions that have not yet been taken.

The euro also found support after Spain's Treasury sold EUR3.53 billion worth of 12-month government bonds, at an average yield of 3.07%, compared to 3.91% at a previous auction.

Madrid also sold EUR982 million worth of 18-month bills at an average yield of 3.33%, down from 4.24% at a previous sale.

Investors were also eyeing Luxembourg Prime Minister Jean-Claude Juncker's visit to Greece on Wednesday, to discuss the country's request for an extension to its fiscal adjustment program.

The greenback was also higher against the pound, with GBP/USD rising 0.35% to 1.5765.

Official data showed earlier that public sector net borrowing in the U.K. posted a surplus of GBP1.8 billion in July, compared to a deficit of GBP12.2 billion in June.

Analysts had expected U.K. public sector net borrowing to post a surplus of GBP2.5 billion in July.

Elsewhere, the greenback was steady against the yen, with USD/JPY dipping 0.02% to hit 79.41, but lower against the Swiss franc, with USD/CHF dropping 0.53% to trade at 0.9678.

The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.26% to 0.9858, AUD/USD climbing 0.56% to 1.0504 and NZD/USD advancing 0.59% to trade at 0.8135.

Earlier in the day, the minutes of the Reserve Bank of Australia's August policy meeting showed that the bank made no mention of a potential rate cut, seeing as domestic economic growth is overshadowing the "fragile" global outlook.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.39% to 82.19.

Trade looked likely to remain subdued on Tuesday, with no significant economic data releases on the calendar, while volumes were light with many market participants on summer holidays.


Forexpros
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