Forexpros – The dollar fell against major world currencies in U.S. trading on Friday after the euro rebounded from a four-month low, while Federal Reserve comments earlier this week that the U.S. central bank will keep the door open to monetary easing also sent the greenback falling.
In U.S. trading on Friday, EUR/USD was trading up 0.22% at 1.2726.
The euro hit a recent four-month low on fears Greece is growing closer to exiting the eurozone, possibly pressuring Spain and others to follow suit.
Greece is headed for parliamentary elections in June, and fears are building that anger over austerity measures slapped on the country in exchange for bailout money will result in strong showing among politicians opposed to harsh rescue-funding terms.
European officials are working on a contingency plan should Greece exit the eurozone, which would include minimalizing the fallout.
“A year and a half ago there maybe was a risk of a domino effect,” says European Union trade commissioner Karel De Gucht, according to newswire reports.
“But today there are in the European Central Bank, as well as in the Commission, services working on emergency scenarios if Greece shouldn’t make it. A Greek exit does not mean the end of the euro, as some claim.”
De Gucht’s words coupled with sentiment that the euro has fallen far enough sent currency rising and the dollar falling across world markets on Friday.
Hints of loose monetary policies out of the U.S. also pushed the greenback down.
Earlier this week, the U.S. Federal Reserve released the minutes of its latest monetary policy meeting, in which members suggested they would favor stimulating the economy should recovery veer off course.
“Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough,” the Federal Reserve minutes read.
The greenback was slightly lower against the pound, with GBP/USD down 0.02% and trading at 1.5794.
The U.S. currency was down against the yen, with USD/JPY trading down 0.22% at 79.10, and down against the Swiss franc, with USD/CHF trading down 0.18% at 0.9441.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.24% at 1.0220, AUD/USD down 0.77% at 0.9813 and NZD/USD down 1.43% at 0.7525.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.21% at 81.52.
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