Forex Pros – The U.S. dollar was broadly higher against its major counterparts on Tuesday, as risk appetite crumbled after an emergency meeting of euro zone policymakers failed to stem fears over the threat of sovereign debt contagion in the single currency bloc.
During European morning trade, the greenback was sharply higher against the euro, with EUR/USD dropping 0.87% to hit 1.3907.
Following Monday’s meeting, the ministers reaffirmed their “absolute commitment” to safeguarding financial stability in the euro zone and said new measures to deal with the crisis would be announced “shortly”, but set no deadline.
The greenback was also up against the pound, with GBP/USD shedding 0.60% to hit 1.5810.
Earlier Tuesday, official data showed that consumer price inflation in the U.K. declined unexpectedly in June.
Elsewhere, the greenback was down sharply against the yen and dipped against the Swiss franc, with USD/JPY tumbling 0.81% to hit 79.60 and USD/CHF slipping 0.03% to hit 0.8356.
The Bank of Japan raised its economic outlook for the second month earlier and left its benchmark interest rate unchanged at 0.1%, in a widely expected decision.
Meanwhile, the greenback posted broad gains against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 0.42% to hit 0.9729, AUD/USD shedding 0.74% to hit 1.0576 and NZD/USD falling 1.63% to hit 0.8156.
A report earlier showed that Australian business confidence fell to a six-month low in June, as concerns over the impact of the high Australian dollar and the global economic outlook weighed.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.61%.
Later in the day, euro zone finance ministers were to meet to hold further discussions on the debt crisis, while the U.S. was to publish official data on its trade balance. Also Tuesday, the Federal Reserve was to publish the minutes of its June policy-setting meeting.
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