Forexpros – The U.S. dollar was mixed against its major counterparts on Tuesday, supported by increased safe haven demand, while the yen and the Swiss franc tested record highs, fanning speculation that Japan’s government would intervene in currency markets to weaken the yen.
During European morning trade, the greenback was higher against the euro, with EUR/USD shedding 0.31% to hit 1.4206.
On Monday, the House of Representatives approved legislation to raise the U.S. debt ceiling by at least USD2.1 trillion and cut federal spending by as much as USD2.4 trillion. The measure was to go to the Senate for a final vote later in the day.
But the outlook for global economic growth remained clouded after data on Monday showed that the U.S. Institute for Supply Management’s Manufacturing Index fell to its lowest level in two years in July.
The greenback was also higher against the pound, with GBP/USD slipping 0.10% to hit 1.6276.
Official data showed earlier that construction activity in the U.K. fell slightly less-than-expected in July.
Meanwhile, the greenback was trading within striking distance of record lows against the yen and Swiss franc, with USD/JPY easing up 0.14% to hit 77.31 and USD/CHF tumbling 0.75% to hit 0.7775.
Japanese Finance Minister Yoshihiko Noda said earlier he would “like to watch market movements closely today, particularly after the progress in the U.S. debt issue,” and added that the government was talking with the Bank of Japan and other countries about yen strength.
In Switzerland, official data showed that retail sales rose significantly more-than-expected in June, while a separate report showed that Swiss manufacturing activity rose unexpectedly in June.
Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.14% to hit 0.9555, AUD/USD falling 0.67% to hit 1.0896 and NZD/USD shedding 0.31% to hit 0.8737.
Earlier in the day, the Reserve Bank of Australia kept the benchmark interest rate unchanged at 4.5% for a record eighth straight meeting, due “acute uncertainty” over the global economic outlook.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.12%.
Later in the day, the U.S. was to publish official data on personal consumption expenditures and personal spending.
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