Forexpros – The U.S. dollar trimmed back gains against its major counterparts on Monday, as concerns over the situation in the euro zone eased somewhat, but market sentiment remained fragile in cautious, holiday-thinned trade.
During European afternoon trade, the dollar pulled back from a session high against the euro, with EUR/USD inching up 0.03% to hit 1.2437.
The euro found support after Portugal’s Finance Minister Vitor Gaspar announced that the country’s EUR78 billion bailout program was on track. Gaspar also said Lisbon is planning a EUR6.65 billion liquidity injection to shore up the country’s fragile banking system.
Meanwhile, official data showed that producer price inflation in the euro zone was flat in April, which could give the European Central Bank leeway to cut rates ahead of its policy meeting this week.
But concerns over the outlook for global growth continued in the wake of Friday’s dismal U.S. employment data, while worries that Spain’s high borrowing costs could force Madrid to seek a bailout also weighed.
The greenback edged lower against the pound, with GBP/USD rising 0.17% to hit 1.5388.
Trade volumes remained thin on Monday, as markets in the U.K. were closed for the Queen’s jubilee.
Elsewhere, the greenback pushed higher against the safe haven yen, with USD/JPY adding 0.17% to hit 78.14.
Earlier Monday, the governor of the Bank of Japan said the central bank was closely monitoring the impact of the yen’s recent gains on the country’s largely export driven economy.
The comments came after the BoJ conducted a rate check on Friday, indicating that it is still prepared to intervene in currency markets to curb the currency’s gains.
The greenback was fractionally lower against the Swiss franc, with USD/CHF dipping 0.05% to hit 0.9654.
The greenback ticked lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.20% to hit 1.0387, AUD/USD rising 0.13% to hit 0.9711 and NZD/USD gaining 0.23% to hit 0.7563.
Earlier Monday, official data showed that Australian company profits fell 4.0% in the first quarter, led lower by a 13% fall in mining profits and a 10% fall in manufacturing profits. Economists had expected a decline of 2.1%.
A separate report showed that job advertisements in Australia declined by 2.4% in May after a 0.8% fall the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.06%, to trade at 82.68.
Later Monday, the U.S. was to release official data on factory orders.
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