Forexpros – The U.S. dollar remained higher against its major counterparts on Monday, supported by safe haven demand following news of the death of North Korean leader Kim Jong il while ongoing concerns over the euro zone debt crisis also hit sentiment.
During European morning trade, the dollar was slightly higher against the euro, with EUR/USD slipping 0.16% to hit 1.3019.
The dollar strengthened broadly on the North Korean news, as uncertainty over the future leadership of the state sparked fears over geopolitical instability in northeast Asia.
Meanwhile, concerns over mass credit rating downgrades across the euro zone lingered after Fitch Ratings put six euro zone nations including Spain and Italy on watch for downgrades on Friday, saying a “comprehensive solution” to the region’s debt crisis was “technically and politically beyond reach.”
Moody’s Investors Service also downgraded Belgium two notches.
The greenback was also higher against the pound, with GBP/USD shedding 0.33% to hit 1.5493.
In the U.K., a report by property website Rightmove showed that house price inflation fell 2.7% in December after a 3.1% decline the previous month.
The greenback was higher against the yen but remained almost unchanged against the Swiss franc, with USD/JPY rising 0.19% to hit 77.91 and USD/CHF inching up 0.03% to hit 0.9365.
In Japan, Finance Minister Jun Azumi said he would monitor financial market moves following the death of Kim Jong il.
Also Monday, Japan’s government said it planned to trim its initial budget for the next financial year back to JPY90 trillion from this year’s record of JPY92 trillion.
Meanwhile, the greenback was lower against its Canadian counterpart but moved higher against its Australian and New Zealand cousins, with USD/CAD sliding 0.16% to hit 1.0364, AUD/USD shedding 0.34% to hit 0.9947 and NZD/USD dipping 0.03% to hit 0.7614.
Earlier in the day, data showed that the Westpac Banking Corporation’s index of consumer sentiment in New Zealand declined in the fourth quarter on concern the European debt crisis may lead to a global economic slowdown.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.16% to hit 80.82.
European Union leaders were to hold talks later in the day to discuss measures aimed at resolving the region’s ongoing debt crisis, including the possibility of European nations lending EUR200 billion to the International Monetary Fund.
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