Forexpros – The U.S. dollar clung on to gains against its major counterparts on Monday, ahead of a teleconference of European finance ministers, after strengthening broadly earlier following news of North Korean leader Kim Jong il’s death.
During European afternoon trade, the dollar was slightly higher against the euro, with EUR/USD dipping 0.07% to hit 1.3032.
The euro remained under pressure as European Union finance ministers prepared to discuss plans to provide up to EUR200 billion in loans to the International Monetary Fund, as well as changes to the EU treaty that would allow a permanent euro zone bailout fund to be established.
Concerns over the risk of credit rating cuts continued to weigh after ratings agency Fitch lowered France’s credit outlook and put six euro zone countries on review pending possible downgrades on Friday.
The dollar pushed broadly higher earlier as the North Korean news fanned concerns over geopolitical instability in northeast Asia, spurring safe haven demand.
The greenback was also higher against the pound, with GBP/USD slipping 0.19% to hit 1.5514.
In the U.K., a report by property website Rightmove showed that house price inflation fell 2.7% in December after a 3.1% decline the previous month.
The greenback was higher against the yen but dipped against the Swiss franc, with USD/JPY rising 0.12% to hit 77.86 and USD/CHF slipping 0.06% to hit 0.9354.
Earlier in the day, Japanese Finance Minister Jun Azumi said he would monitor financial market moves following the death of Kim Jong il.
Also Monday, Japan’s government said it planned to trim its initial budget for the next financial year back to JPY90 trillion from this year’s record of JPY92 trillion.
Meanwhile, the greenback was lower against its Canadian counterpart, with USD/CAD shedding 0.24% to hit 1.0356. The greenback was higher against its Australian cousin but remained almost unchanged against the New Zealand dollar, with AUD/USD shedding 0.18% to hit 0.9963 and NZD/USD dipping 0.01% to hit 0.7615.
A report earlier showed that the Westpac Banking Corporation’s index of consumer sentiment in New Zealand declined in the fourth quarter on concern the European debt crisis may lead to a global economic slowdown.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.04% to hit 80.71.
Also Monday, the European Central Bank said that the euro zone current account recorded a deficit of EUR7.5 billion in October, swinging from a surplus of EUR2.2 billion the previous month.
Analysts had expected the region’s current account post a deficit of EUR1.9 billion in October.
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