Forexpros – The U.S. dollar was higher against all of its major counterparts on Monday, after European leaders disappointed expectations for an agreement on a comprehensive plan to arrest the spread of the debt crisis in the euro zone.
During European morning trade, the dollar was up against the euro, with EUR/USD tumbling 0.87% to hit 1.3269.
European Union leaders agreed Friday to implement stricter budgetary rules across the euro zone and to provide EUR200 billion in loans to the International Monetary Fund to assist countries with debt problems.
But investors remained jittery after the European Central Bank indicated that it had no plans to increase its bond purchasing program, capping its weekly bond purchases at EUR20 billion.
Meanwhile, speculation over a possible downgrade of the euro zone’s sovereign debt by Standard & Poor’s continued after the ratings agency placed the credit ratings of 15 euro zone members, including France and Germany on negative watch last week and said it would announce any ratings changes “as soon as possible” after Friday’s summit.
The greenback was also higher against the pound, with GBP/USD falling 0.77% to hit 1.5546.
U.K. Prime Minister David Cameron vetoed EU treaty changes aimed at tightening fiscal rules after failing to secure concessions relating to London’s financial services industry.
Elsewhere, the greenback was stronger against the yen and the Swiss franc, with USD/JPY rising 0.26% to hit 77.82, and USD/CHF advancing 0.71% to hit 0.9296.
In Switzerland, official data showed that the number of people employed rose more-than-expected in the third quarter, but for the first time in two years the employment outlook indicator showed a vey slight decline in a year-on-year comparison.
In addition, the greenback was sharply higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD surging 0.82% to hit 1.0252, AUD/USD tumbling 1.05% to hit 1.0111 and NZD/USD plunging 1.25% to hit 0.7657.
Earlier in the day, official data showed that Australia’s trade surplus increased less-than-expected in November. A separate report showed that Australian home loan approvals rose more-than-expected last month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, jumped 0.91% to hit a three-week high of 79.86.
Also Monday, ratings agency Moody’s warned that the debt crisis in the euro zone was still in a “critical” and “volatile” stage, adding that the region still faced increasing risks to cohesion.
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