Forexpros – The U.S. dollar was broadly higher against its major counterparts on Monday, as investors remained cautious ahead of a series of global central bank meetings later in the week, although hopes for further easing measures mildly supported sentiment.
During European morning trade, the dollar was higher against the euro, with EUR/USD dropping 0.51% to 1.2258.
The euro found strong support last week, after European Central Bank President Mario Draghi pledged to do whatever was necessary to protect the euro zone from collapse, fueling hopes that the ECB would act to lower borrowing costs for highly indebted countries such as Spain and Italy.
German Chancellor Angela Merkel and French President Fran?ois Hollande vowed to defend the euro in a joint statement on Friday and said that they are “deeply committed to the integrity of the euro zone.”
Investors remained cautious however as German Economy Minister Philipp Roesler warned the ECB earlier about any large-scale government bond purchases.
Also Monday, preliminary data showed that Spain’s gross domestic product fell 0.4% in the second quarter, in line with expectations and following a 0.3% decline in the previous quarter.
The greenback was also higher against the pound, with GBP/USD shedding 0.43% to 1.5679.
The Bank of England said that net lending to individuals fell declined to GBP0.3 billion in June from GBP1.1 billion the previous month, disappointing expectations for a fall to GBP0.8 billion.
Sentiment on sterling remained fragile after official data last week showed that the U.K. economy contracted significantly more-than-expected in the three months to June, extending the U.K. recession into a third quarter.
Elsewhere, the greenback was lower against the yen, with USD/JPY declining 0.39% to hit 78.16, but was higher against the Swiss franc, with USD/CHF rising 0.46% to trade at 0.9797.
Earlier in the day, preliminary data showed that industrial production in Japan fell unexpectedly in June, ticking down 0.1% after a 3.4% drop the previous month.
Analysts had expected industrial production to rise 1.6% in June.
The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD edging up 0.17% to 1.0048, AUD/USD retreating 0.19% to 1.0463 and NZD/USD falling 0.16% to trade at 0.8080.
In New Zealand, official data showed that building consents rose 5.7% in June, following a 7.2% decline the previous month.
Meanwhile, industry data showed that new home sales in Australia rose 2.8% in June, after a 0.7% increase the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.29% to 82.92.
Markets were also looking ahead to the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the bank will hint at further easing measures.
Later in the day, U.S. Treasury Secretary Timothy Geithner was to meet with German Finance Minister Wolfgang Schaeuble and Mario Draghi to discuss the global economy.
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