Forexpros – The U.S. dollar gained ground Monday on a looming euro zone debt deadline and Spain’s security auction tomorrow.
During late session U.S. trade, the greenback was higher against the euro, with EUR/USD off by 0.20 % to hit 1.3017.
The single currency was hit by a multitude of bearish factors including the looming self imposed euro zone IMF funding deadline, uncertainty over Tuesday’s Spanish security auction, Fitch’s downgrades and the death of Korean strong man Kim Jung”.
The greenback was also down against the pound, with GBP/USD falling 0.16% to hit 1.5519.
Rating agency Fitch lowered France’s credit outlook and placed six euro zone nations on downgrade watch after stating it believes that a solution to the debt crisis is beyond reach.
EU financial leaders participated in a conference call today in an attempt to establish permanent euro zone bail out fund, but investors remain nervous about the fund actually being launched.
Kim Jong’s death added to fears of geopolitical instability triggering a flight to the relative safety of the U.S. Dollar.
Meanwhile, Spain is scheduled to auction three and six month securities Tuesday. Spanish two year note yields fell eight basis points to 3.38%.
Bank of America has warned that the euro may drop to the weakest level in almost a year and a half per Bloomberg.
In addition, the greenback was higher against the yen and against the Swiss franc with USD/JPY higher by 0.25% to hit 77.96 and USD/CHF climbing 0.05% to hit 0.9366.
The greenback was lower against its Canadian neighbor but higher against its Australian and New Zealand counterparts with USD/CAD falling 0.07% to hit 1.0375, AUD/USD giving back 0.84 to hit 0.9898 and NZD/USD falling 0.85% to 0.7552.
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