Forexpros – The U.S. dollar extended broad gains against its major counterparts on Monday, as ongoing U.S. and euro zone debt concerns overshadowed upbeat U.S. home sales data, boosting demand for the safe haven greenback.
During U.S. morning trade, the dollar was up against the euro, with EUR/USD dropping 0.38% to hit 1.3473.
Earlier in the day, the spread between 10-year Spanish bond yields and their German counterparts widened amid uncertainty over the ability of Madrid’s newly elected government to deal with its economic problems.
Also Monday, rating’s agency Moody’s said a rise in French government debt yields and weaker growth prospects could be negative for the outlook on the country’s credit rating.
The greenback was also sharply higher against the pound, with GBP/USD tumbling 1.13% to hit 1.5627.
The pound was weighed by concerns over fresh monetary easing measures after a senior Bank of England policymaker said last week that there was a “very strong case” for extending the central bank’s asset purchase program next year.
Elsewhere, the greenback was higher against the yen and the Swiss franc, with USD/JPY edging up 0.09% to hit 76.97 and USD/CHF rising 0.16% to hit 0.9181.
In Japan, government data showed that exports fell in October at the fastest pace in five months, underscoring concerns that sputtering global growth and a strong yen will take their toll on the country’s economy.
The greenback was also sharply higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 1.25% to hit 1.0405, AUD/USD shedding 1.89% to hit 0.9822 and NZD/USD declining 1.33% to hit 0.7464.
In Canada, official data showed that wholesale sales rose less-than-expected in September, up 0.3%, missing expectations for a 0.6% gain.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.36% to hit 78.50.
The greenback strengthened as the failure of a U.S. congressional “super committee” to agree on a package of measures to slash USD1.2 trillion off the U.S. deficit over the next 10 years weighed on risk appetite.
A formal announcement was expected later in the day.
Also Monday, the National Association of Realtors said that U.S. existing home sales rose unexpectedly in October, climbing to 4.97M from 4.90M the previous month.
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