Forexpros – The U.S. dollar traded higher against its major counterparts Tuesday, as investors turned on the risk off mode due to Friday’s weaker-than-expected U.S. employment data, while fears over the ongoing debt crisis in the euro zone hit the single currency.
During U.S. afternoon trade, the dollar was modestly higher against the euro, with EUR/USD easing lower by 0.05% to hit 1.3099.
Worries over high Spanish borrowing costs depressed the euro, as the yield on Spain’s 10-year government bonds ticked up to 5.9% from 5.8% earlier in the day, amid fears that the country will be the next in the euro zone to require a bailout.
The increase in borrowing costs came despite reassurances from Spanish Prime Minister Mariano Rajoy earlier that the country will cut its budget deficit to 3% of gross domestic product in 2013.
Sentiment on the single currency was also hit after a report showed that investor sentiment in the euro zone dropped this month, after three successive monthly increases.
The greenback was up against the pound, with GBP/USD dropping 0.20% to hit 1.5860.
Industry data indicated earlier that U.K. house prices declined at the slowest pace since June 2010 in March.
In U.K. housing news, The Royal Institution of Chartered Surveyors’ seasonally adjusted house price balance rose to minus 10 from minus 13 in February, beating forecasts for a more modest rise to minus 12.
The greenback was lower against the yen, but was slightly higher against the Swiss franc, with USD/JPY falling 0.94% to hit 80.73 and USD/CHF rising 0.02% to hit 0.9174.
Earlier in the day, the Bank of Japan held its benchmark interest rate close to zero and left its JPY30 trillion yen asset-purchase fund unchanged, in a widely expected move.
The central bank reported that no board member proposed additional easing at the two-day policy meeting, although investors expect fresh measures to be announced following the bank’s next policy meeting on April 27.
Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.46% to hit 1.0022, AUD/USD losing 0.34% to hit 1.0277 and NZD/USD dropping 0.76% to hit 0.8153.
Sentiment on the growth-linked dollars was hit earlier after official data showed that Chinese imports declined sharply in March, dampening the outlook for global growth.
China posted a trade surplus of USD5.35 billion last month, as imports grew just 5.3% after increasing by 39.6% in February.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, added 0.03% to hit 79.99.
The outlook for the U.S. recovery remained clouded after government data on Friday showed that the economy added just 120,000 jobs in March, the lowest number since December and well below expectations for a 203,000 increase.
At a conference earlier in the day, Federal Reserve Chairman Ben Bernanke said the U.S. economy was “still far from having fully recovered” from the financial crisis.
Forexpros
