Forexpros – The U.S. dollar advanced against its major counterparts on Wednesday, as euro zone debt crisis fears sent investors seeking the relative safety of the greenback.
During mid session U.S. trade, the greenback traded higher against the euro, with EUR/USD falling 0.77% to 1.2949.
The single currency was depressed by a triple whammy of Italian bank fears, a monotonous German debt auction, and European Central Bank overnight deposits striking all time highs.
The results of the German bond auctions were far from inspiring with an average yield of 1.93 compared with 1.98 in November.
The U.S. dollar was up against the pound, with GBP/USD falling 0.17% to hit 1.5622.
In other news, official data showed that euro zone inflation dropped from 3% to 2.8% in December adding to rate cut euro bearishness.
Meanwhile, A UK report indicated that construction activity surprisingly increased in December, extending the expansion to 12 months.
The greenback was lower against the yen but sharply higher against the Swiss franc with USD/JPY off by 0.03 to 76.71 and USD/CHF soaring 1.04% to hit 0.942.
In addition the greenback was higher against its Canadian, Australian and New Zealand cousins with USD/CAD falling 0.27% to hit 1.0133, AUD/USD dropping 0.22% to hit 1.0355 and NZD/USD giving back 0.28% to 0.7870.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.58% to hit 80.42.
Investors are anxiously awaiting renewed euro zone crisis talks starting on January, 9th as well as U.S. payroll numbers on January 6th.
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