Forexpros – The U.S. dollar was broadly lower against its major counterparts on Monday, after data showed that the U.S. service sector expanded unexpectedly in January, while uncertainty over the outcome of a Greek debt swap deal weighed on risk appetite.
During U.S. morning trade, the dollar was modestly lower against the euro, with EUR/USD rising 0.23% to hit 1.3228.
Sentiment on the single currency remained fragile amid uncertainty over whether Greece will finalize a debt swap deal with its private creditors ahead of a March 8 deadline.
A failure to agree on the debt restructuring deal would put the country back on the brink of a sovereign debt default.
But the euro found support after official data showed that retail sales across the euro zone rose for the first time in five months in January, increasing by a seasonally adjusted 0.3%, defying expectations for a 0.1% decline.
The positive data offset a report showing that the euro zone’s services sector contracted at faster rate than initially estimated in February, shrinking for the fifth time in six months.
The greenback was also lower against the pound, with GBP/USD easing up 0.18% to hit 1.5861.
Earlier Monday, data showed that the U.K. service sector expanded in February, albeit at a slower than expected pace, fuelling hopes that the economy will avoid slipping into a recession in the first quarter.
In addition, the greenback was lower against the yen and the Swiss franc, with USD/JPY shedding 0.49% to hit 81.40 and USD/CHF sliding 0.27% to hit 0.9114.
In Switzerland, official data showed that retail sales increased at the fastest rate in seven months in January, jumping 4.4% year-over-year, after a 1.7% increase the previous month.
Meanwhile, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.48% to hit 0.9938, AUD/USD falling 0.59% to hit 1.0668 and NZD/USD tumbling 0.89% to hit 0.8216.
Demand for growth linked currencies was hit earlier after Chinese Premier Wen Jiabao cut the nation’s economic growth target to 7.5% for 2012 from a previous target of 8%, in order to allow the pace of economic expansion room to moderate if necessary.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.18% to hit 79.33.
The Institute of Supply Management said its non-manufacturing purchasing managers’ index climbed to 57.3 in February from a reading of 56.8 the previous month. Analysts had expected the index to decline to 56.1.
A separate report showed that U.S. factory orders fell, albeit at a slower than forecast pace in January, declining by a seasonally adjusted 1.0%, compared to expectations for a 1.3% slide.
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