Forex Pros — The U.S. dollar was broadly higher against its major counterparts on Monday, as ongoing fears over the sovereign debt crisis in the euro zone dampened demand for higher yielding assets, bolstering the greenback.
During European morning trade, the greenback was sharply higher against the euro, with EUR/USD tumbling 1.05% to hit 1.4007.
Fitch Ratings cut Greece’s debt ratings by three notches on Friday, while Standard & Poor’s cut its outlook for Italy to negative from stable on Saturday. Meanwhile, Spain’s ruling Socialist party lost to conservatives in elections on Sunday, raising concerns about how the country will address its debt problems.
The greenback was also higher against the pound, with GBP/USD shedding 0.44% to hit 1.6161.
Elsewhere, the greenback was down against the yen but up against the Swiss franc with USD/JPY slipping 0.18% to hit 81.55 and USD/CHF rising 0.55% to hit 0.8825.
The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.49% to hit 0.9787, AUD/USD dropping 1.07% to hit 1.0544 and NZD/USD falling 0.87% to hit 0.7890.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, surged 0.76%.
Earlier Monday, preliminary data showed that manufacturing activity in the euro zone fell more-than-expected in May, dropping to a seven-month low.
Markit said that its preliminary manufacturing PMI fell to a seasonally adjusted 54.8 in May, down from a final reading of 58.0 in April. Analysts had expected the index to decline to 57.6 in May. A number above 50 indicates expansion in the sector.
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