Forexpros – The dollar gained against other currencies on Monday on a wave of data depicting a cooling Chinese economy, while an ongoing political stalemate in Greece stoked more fears the country is headed out of the eurozone.
In Asian trading on Monday, EUR/USD was down 0.20% and trading at 1.2891.
In Asia, the Chinese economy continues to battle headwinds.
The country’s industrial output climbed by 9.3% in April from a year earlier, according to official data, below forecasts for a 12% gain.
Meanwhile, Chinese retail sales rose 14.1%, below market expectations for 15.2% expansion.
Over the weekend, the People’s Bank of China cut by 50 basis points banks’ reserve requirement ratio effective May 18.
The news sparked demand for greenbacks.
Greek political woes fueled demand for greenbacks as well.
Greece’s political parties have said they want to stick with the euro, but doubts the country will meet austerity requirements to stay in the eurozone continued to build after President Karolos Papoulias was unable over the weekend to patch together a coalition.
Conservative political party New Democracy, left-wing Syriza, socialist PASOK and the smaller Democratic Left have been trying to create a government after May 6 parliamentary elections failed to give any one bloc enough backing to create a government.
Greece has agreed to tough austerity measures in exchange for multilateral rescue funding, although widespread anger at such policies including layoffs, tax hikes and public spending cuts resulted in factional parliamentary results.
Failure to decide on a coalition government soon will force a second round of elections, seen by many as a tipping point towards a Greek exit from the eurozone, which had the euro weakening in early Asian trading and the dollar gaining.
Talks will continue among major political parties, although Syriza has balked in opposition to austerity measures gripping the country’s economy.
Meanwhile, March eurozone industrial output figures out due out later Monday, and markets were on edge for a weaker-than-expected figure.
Market expectations so far see a gain of 0.4% in March compared to a 0.8% gain in February.
The greenback, meanwhile, was flat against the pound, with GBP/USD trading at 1.6070.
The U.S. currency was up against the yen, with USD/JPY trading up 0.18% at 80.08, and up against the Swiss franc, with USD/CHF up 0.21% and trading at 0.9318.
The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.07% at 0.9999, AUD/USD up 0.03% at 1.0022 and NZD/USD down 0.07% at 0.7824.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% at 80.56.
Later Monday, the U.S. is to produce a report on mortgage delinquencies, a key signal of the housing market, which continues to lag on the country’s recovery.
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