Forexpros – The U.S. dollar gave up some ground against its major counterparts on Monday, but the safe haven greenback remained supported amid concerns over political uncertainty in the euro zone, in the wake of weekend elections in Greece and France.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD dropping 0.35% to hit 1.3038.
The euro found some support after official data showed that German factory orders rose by a seasonally adjusted 2.2% in March, easily surpassing expectations for a 0.5% increase.
But the single currency remained under pressure after weekend election results in Greece threw the future of the country’s international bailout agreement into doubt and fuelled fears over a possible Greek exit from the euro zone.
Neither of the country’s two pro-bailout parties secured enough votes to form a government, as voters favored smaller parties who campaigned against harsh austerity measures.
Earlier Monday, the head of the euro zone’s temporary bailout fund, the European Stability Mechanism, said a Greek exit from the euro zone would be a “catastrophe” for the country.
Meanwhile, in France, President Nicolas Sarkozy was defeated by socialist candidate Fran?ois Hollande, who has said he wants to renegotiate the euro zone fiscal pact in order to stimulate growth in the region.
The greenback dipped lower against the pound, with GBP/USD inching up 0.07% to hit 1.6160.
Elsewhere, the greenback edged higher against the yen, with USD/JPY easing up 0.10% to hit 79.92 and pushed higher against the Swiss franc, with USD/CHF rising 0.38% to hit 0.9215.
Earlier in the day, government data showed that the rate of unemployment in Switzerland came in at 3.1% in April. A separate report showed that Swiss consumer price inflation rose less-than-expected last month, adding 0.1%, against expectations for a 0.2% increase.
Also Monday, the minutes of the Bank of Japan’s April policy meeting said that Japan’s economic activity was showing signs of improvement but that there was still a high degree of uncertainty regarding the global outlook.
The greenback was little changed against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing up 0.05% to hit 0.9963, AUD/USD adding 0.08% to hit 1.0188 and NZD/USD inching up 0.04% to hit 0.7957.
The Australian dollar found support after official data showed that domestic retail sales rose more-than-expected in March, adding 0.9%, beating expectations for a 0.3% increase.
The data came after a separate report showed that building approvals in Australia jumped 7.4% in March, above expectations for a 3.2% rise.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.24%, at 79.79.
Trading volumes were expected to remain light on Monday as markets in the U.K. were closed for a bank holiday.
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