Forexpros – The U.S. dollar was higher against almost all of its major counterparts on Monday, as broad concerns over the situation in the euro zone overshadowed relief over Sunday’s election victory by Greece’s pro-bailout New Democracy party.
During U.S. morning trade, the dollar was higher against the euro, with EUR/USD down 0.53% to hit 1.2572.
The euro came off early highs against the greenback after the yield on Spanish 10-year bonds surged to a euro-era high of 7.28%, amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
The 7% threshold is widely considered unsustainable in the long run and is the level at which Greece, Ireland and Portugal were forced to seek international bailouts.
Meanwhile, the yield on Italian 10-year bonds remained above 6% amid fears over sovereign debt contagion to the euro zone’s fourth largest economy.
Investors were also jittery amid concerns over the ability of Greece’s New Democracy party to form a strong coalition government in order to allow Athens to resume financial aid negotiations following Sunday’s narrow election victory.
The greenback was also higher against the pound, with GBP/USD falling 0.35% to hit 1.5660.
The pound was weighed by speculation that the Bank of England may announce further quantitative easing measures, as investors looked ahead to Wednesday’s minutes from the central bank’s June meeting.
Elsewhere, the greenback pared gains against the yen, with USD/JPY up 0.25% to hit 78.89, but pushed higher against the Swiss franc, with USD/CHF advancing 0.52% to hit 0.9552.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.45% to hit 1.0260, AUD/USD dipping 0.02% to hit 1.0077 and NZD/USD up 0.32% to hit 0.7904.
Earlier Monday, official data showed that foreign investors’ acquisitions of Canadian securities rose significantly more-than-expected in April, rising to CAD10.16 billion, far outstripping expectations for a CAD5.0 billion increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.64%, to trade at 82.33.
Later in the day, U.S. President Barak Obama was to hold a meeting with German Chancellor Angela Merkel, as leaders from the Group of 20 nations gathered for a two-day summit in Los Cabos, Mexico.
Forexpros
