Forexpros – The U.S. dollar was broadly lower against its major counterparts on Tuesday, as the recent announcement of a European bailout for Spain moderately supported investor confidence, although uncertainty over the outcome of Greece’s Sunday elections weighed.
During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.22% to hit 1.2509.
Sentiment on the euro remained fragile as the exact amount Spain is to receive to recapitalize its banks will only be decided later this month, after the results of independent audits are published.
In addition, questions remained over the source of the funds and whether the bailout repayments would add to the country’s already high borrowing costs.
Investors also remained cautious ahead of Sunday’s general election in Greece, amid fears that that the election of anti-bailout parties to government could precipitate an exit from the euro area.
The greenback was fractionally lower against the pound, with GBP/USD easing up 0.08% to hit 1.5502.
The pound came under pressure after official data showed that manufacturing output in the U.K. fell 0.07% in April, disappointing expectations for a more modest 0.2% decline, while a separate report showed that industrial production was flat in April, disappointing expectations for a 0.1% increase.
The weaker-than-expected data fuelled speculation that the Bank of England may implement more monetary stimulus measures in order to shore up economic growth in the U.K.
Elsewhere, the greenback was higher against the yen but lower against the Swiss franc, with USD/JPY adding 0.19% to hit 79.60 and USD/CHF falling 0.25% to hit 0.9598.
The yen weakened after the International Monetary Fund said earlier that the currency was “moderately overvalued,” and indicated that it supported Japan’s view on yen weakening interventions, given current market conditions.
In addition, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.26% to hit 1.0290, AUD/USD advancing 0.55% to hit 0.9917 and NZD/USD climbing 0.71% to hit 0.7745.
Industry data showed earlier that house prices in New Zealand rose 1.7% in May, following a 0.3% decline the previous month.
Meanwhile, an index of business confidence for Australia fell to minus 2 in May from a reading of 4 the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.16%, to trade at 82.93.
Later in the day, the U.S. was to publish official data on import prices as well as a government report on federal budget balance.
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