Forexpros – The U.S. dollar pushed higher against most of its major counterparts on Monday, regaining some of the ground lost in Friday’s broad-based risk rally, as optimism over fresh measures to ease the debt crisis in the euro zone waned.
During European morning trade, the dollar was higher against the euro, with EUR/USD slipping 0.18% to hit 1.2641.
On Friday, European Union leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and also agreed to set up a joint banking supervisory body for the euro area.
The agreement caught markets by surprise, as expectations for concrete progress on dealing with the crisis had faded in the run up to the talks.
But market sentiment cooled as details about how and when European leaders can put the newly agreed measures into practice remained uncertain.
The greenback was also higher against the pound, with GBP/USD sliding 0.09% to hit 1.5687.
Earlier Monday, data showed that manufacturing activity in the U.K. improved in June, but conditions remained fragile.
The U.K. manufacturing purchasing managers’ index rose to 48.6 in June from a reading of 45.9 in May, but remained below the 50 level which separates contraction from expansion. Analysts had expected a reading of 46.7.
Elsewhere, the greenback was lower against the yen but higher against the Swiss franc, with USD/JPY losing 0.09% to hit 79.72 and USD/CHF adding 0.14% to hit 0.9501.
In Switzerland, official data showed that retail sales jumped 6.2% year-over-year in May, outstripping expectations for a 5.0% gain.
Another report showed that Swiss manufacturing activity improved unexpectedly in June, but remained in contraction territory for the third consecutive month.
The Swiss SVME PMI rose to a seasonally adjusted 48.1 in June from a reading of 45.4 in May. Analysts had expected the index to tick down to 45.0.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.02% to hit 1.0168, AUD/USD edging up 0.21% to hit 1.0258 and NZD/USD rising 0.22% to hit 0.8030.
Earlier Monday, data showed that China’s HSBC PMI posted a reading of 48.2 in June, little changed from an initial estimate of 48.1, remaining in contraction territory for the eighth successive month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, eased up 0.10%, to 81.78.
Later in the day, the Institute for Supply Management was to release a report on activity in the U.S. manufacturing sector.
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