Forexpros – The U.S. dollar was steady against its major counterparts on Tuesday, as concerns over the debt crisis in the euro zone continued to dominate after Standard & Poor’s said it would downgrade euro zone nations en masse if leaders fail to reach an agreement on how the handle the debt crisis this week.
During European afternoon trade, the dollar was up against the euro, with EUR/USD slipping 0.10% to hit 1.3387.
Late Monday, S&P put the long-term sovereign-debt ratings of 15 euro zone members, including Germany, Italy and Spain on negative watch and flagged a potential two-notch downgrade for France.
The euro remained supported after German Chancellor Angela Merkel said European Union leaders will take important decisions to stabilize the euro zone at a summit later this week and brushed off S&P’s warning.
Elsewhere, official data showed that German industrial orders for October posted their strongest rise since March 2010.
The greenback was also higher against the pound, with GBP/USD shedding 0.21% to hit 1.5615.
The pound was hit after a report by the British Retail Consortium showed that retail sales posted the largest annual drop in like-for-like sales since May last month.
Meanwhile, mortgage lender Halifax also reported a 0.9% monthly fall in U.K. house prices in November, worse than the 0.1% dip expected by economists, although it said it expected the housing market to hold steady in the coming months.
Elsewhere, the greenback dipped against the yen but strengthened against the Swiss franc, with USD/JPY inching down 0.02% to hit 77.79, and USD/CHF rising 0.48% to hit 0.9250.
In Switzerland, a report showed that consumer price inflation declined unexpectedly in November, easing for the second consecutive month as the strong franc weighed on prices.
The soft data sparked speculation that the Swiss National Bank may raise it’s minimum exchange rate target of 1.20 per euro to ward off deflation.
The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.31% to hit 1.0194, AUD/USD dropping 0.55% to hit 1.0214 and NZD/USD sliding 0.37% to hit 0.7773.
Earlier Tuesday, the RBA cut its benchmark interest rate from 4.50% to 4.25%, easing policy for the second successive month.
Commenting on the decision, RBA Governor Glenn Stevens said that fiscal conditions have been more difficult, particularly in the euro zone and this was likely to weigh on global growth.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.08% to hit 78.78.
Also Tuesday, Eurostat said that the euro zone’s gross domestic product expanded in line with expectations in the third quarter, growing by 0.2%, unchanged from an initial estimate.
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