Forexpros – The U.S. dollar was broadly lower against its major counterparts on Monday, as signs of progress in handling the debt crisis in the euro zone supported demand for riskier assets.
During European morning trade, the dollar was down against the euro, with EUR/USD rising 0.89% to hit 1.3358.
The euro rallied amid hopes that European Union leaders would be able to reach an agreement on a fiscal pact to halt the spread of the region’s debt crisis ahead of an EU summit early next month.
The pact, if agreed, would make budget discipline legally binding and enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.
Earlier Monday, Moody’s Investors Service warned that the rapid escalation of the euro zone sovereign and banking crisis was threatening the credit ratings of all European government bonds.
The greenback was also lower against the pound, with GBP/USD advancing 0.64% to hit 1.5540.
Elsewhere, the greenback was down against the yen and the Swiss franc, with USD/JPY edging up 0.03% to hit 77.70, and USD/CHF dropping 0.91% to hit 0.9215.
Earlier in the day, the governor of the Bank of Japan warned that the outlook for the country’s economy remained clouded by the ongoing debt crisis in the euro zone and the strong yen, signaling the central bank’s readiness to boost monetary stimulus.
The greenback was also sharply lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD tumbling 1.11% to hit 1.0352, AUD/USD surging 1.96% to hit 0.9902 and NZD/USD jumping 1.7% to hit 0.7567.
The National Bank of New Zealand said earlier that its index of business confidence rose to 18.3 for November, after a reading at 13.2 the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.86% to hit 79.15.
Later in the day, the U.S. was to release official data on new home sales.
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