Forexpros – The dollar erased some of its gains against most major world currencies on Wednesday as investors sold greenbacks to invest in Asian equities.
Fears an upcoming European Union summit won’t produce specific policy guidelines to tackle the crisis coupled with surprising housing numbers out of the U.S. bolstered the greenback somewhat.
In Asian trading on Wednesday, EUR/USD was trading up 0.03% at 1.2499.
The European debt crisis refuses to let up its grip on markets worldwide, and fears have begun to build that an upcoming European Union summit aimed at fighting the crisis will end in impasse.
Germany continues to reject calls to take part in financing a single bond issue backed by European countries to ease credit conditions in debt-ridden swathes of the continent.
Adding to the dollar’s gains, Cyprus has said it will seek financial assistance from the European Union, while yields in Italian two-year bonds rose as well.
Borrowing costs remain high in Europe as well, in Spain especially.
In Spain, the government sold at auction EUR1.6 billion in three-month government carrying an average yield of 2.36%, up from 0.84% in May.
The government also sold EUR1.48 billion in six-month debt at an average yield of 3.23%, up from 1.73% in May.
Meanwhile, the yield on Spanish 10-year bonds rose to 6.73% in earlier trading, not far from the 7% level deemed unsustainable in the markets, which sent the dollar rising and the euro falling.
The greenback, however, did face headwinds.
In the U.S., consumer confidence fell to 62.0 in June from 64.4 in May, well below market calls for a 63.5 reading, according to the Conference Board.
Weaker-than-expected consumer confidence numbers often fuel talk that the Federal Reserve will stimulate the economy with monetary policy tools that would send the dollar falling to spur recovery.
Strong housing data, however, offset the weak confidence figures.
The Standard & Poor’s-Case-Shiller home price index fell at an annualized rate of 1.9% in April, better than expectations for a 2.5% drop.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.02% and trading at 1.5639.
The U.S. currency was down against the yen, with USD/JPY trading down 0.11% at 79.44, and down against the Swiss franc, with USD/CHF trading down 0.07% at 0.9605.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD flat at 1.0238, AUD/USD also flat at 1.0066 and NZD/USD down 0.09% at 0.7903.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% at 82.50.
Later Wednesday, New Zealand is to release official data on the country’s trade balance.
Also on Wednesday, the U.S. will publish official data on durable goods orders, a leading indicator of production, as well as industry data on pending home sales and a government report on crude oil stockpiles.
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