Forexpros – The U.S. dollar was higher against most of its major counterparts on Tuesday, as fears over the debt crisis in the euro zone intensified, causing investors to spurn riskier assets.
During European morning trade, the greenback was up against the euro, with EUR/USD falling 0.67% to hit 1.3586.
The euro was pressured lower amid doubts that China would support Italy by buying its government debt, following earlier reports to the contrary. Italy was due to auction up to EUR7 billion of bonds later in the day.
Meanwhile, mounting fears over a potential Greek default and expectations for a ratings cut on France’s three largest banks, due to their exposure to Greek holdings, also weighed.
The greenback was also higher against the pound, with GBP/USD shedding 0.52% to hit 1.5779.
Official data released earlier showed that U.K. consumer price inflation rose in line with expectations in August, rising by 4.5%. A separate report showed that the country’s trade deficit remained unchanged at GBP8.9 billion in July.
Elsewhere, the greenback was down against the yen, but posted gains against the Swiss franc, with USD/JPY shedding 0.29% to hit 76.98 and USD/CHF advancing 0.67% to hit 0.8859.
Speaking earlier, Japan’s Prime Minister Yoshihiko Noda reiterated that the government and the Bank of Japan need to “take all policy steps available” to curb the strength of the yen.
Meanwhile, the greenback was higher against its Canadian, Australian and New Zealand cousins, with USD/CAD climbing 0.45% to hit 0.9971, AUD/USD falling 0.64% to hit 1.0279 and NZD/USD shedding 0.55% to hit 0.8186.
Earlier Tuesday, a report by National Australia Bank showed that business confidence fell to the lowest level since April 2009 last month, as increased global uncertainty and concerns over the euro zone debt crisis weighed on sentiment.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to hit 78.04.
Later in the day, the U.S. was to release official data on import prices, as well as a report on the federal budget balance.
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