Forexpros – The U.S. dollar was mixed against its major counterparts on Monday, following an S&P downgrade of U.S. government debt, while the euro was boosted after the European Central Bank said it would begin buying Italian and Spanish bonds.
During European morning trade, the greenback was lower against the euro, with EUR/USD gaining 0.39% to hit 1.4335.
The European Central Bank said late Sunday that it “will actively implement” its bond-buying program, indicating that it will likely buy Spanish and Italian government bonds in an attempt to ease investors concerns over the region’s ongoing debt crisis.
The greenback was also down against the pound, with GBP/USD edging 0.15% higher to hit 1.6419.
Meanwhile, the greenback posted sharp losses against the safe haven yen and Swiss franc, with USD/JPY slumping 0.82% to hit 77.82 and USD/CHF retreating 0.95% to hit 0.7601, after falling to a record low of 0.7526 earlier.
Earlier Monday, official data showed that Switzerland’s unemployment held steady at a seasonally adjusted 3.0% in July, as widely expected.
Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing up 0.1% to hit 0.9829, AUD/USD shedding 0.8% to hit 1.0360 and NZD/USD tumbling 1.6% to hit 0.8297.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.46% to hit 74.42.
Ratings agency Standard and Poor’s downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
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