Forex – Dollar mostly higher in mid-day Asian trade

Forexpros – The U.S. dollar was broadly higher against its major counterparts in Asian trade Friday, with the notable exception of the Japanese yen, following a surge on Wall Street lifted on the announced plan of action by European officials to tackle the region’s debt crisis.

In mid-day Asian trade, the greenback was higher against the euro, with EUR/USD falling 0.15% to hit 1.4167.

Following a second summit in four days, European leaders presented their long-awaited plan to address regional debt threats with an expansion of their rescue fund, and an agreement from private investors to take a 50% write-down in their holdings of Greek government debt.

Officials agreed to expand the European Financial Stability Facility to USD1.4 trillion by persuading bondholders to accrue losses on Greek debt as well a recapitalization of European banks. The deal includes the possibility of an enhanced role for the International Monetary Fund to strengthen the bailout fund.

Later Thursday, the U.S. Bureau of Economic Analysis reported that gross domestic product expanded by 2.5% in the third quarter, slightly above an anticipated 2.4% gain and the fastest pace since the third quarter of last year.

Separately, the U.S. Department of Labor said that the number of Americans filing for initial jobless benefits fell by 2,000 to a seasonally adjusted 402,000 for the week ending October 22.

Market expectations were for a decline to 400,000 for the week.

Wall Street shares rallied on the news from Europe and the surprising GDP numbers, as the Dow Jones Industrial Average gained 2.86%, the Nasdaq Composite Index surged 3.32%, and the S&P 500 leapt 3.43%.

Meanwhile, the greenback was higher against the British pound, with GBP/USD losing 0.13% to hit 1.6078.

The Japanese yen’s persistent strength against the greenback following USD/JPY falling to an all-time, post-war low of 75.75 on Tuesday, raised speculation that the Bank of Japan would follow up its August 4 currency intervention in an attempt to weaken the yen.

On Thursday, Japan’s Finance Minister Jun Azumi vowed that Japan would take decisive action to prevent further excessive moves by the yen. The Bank of Japan earlier announced plans for further monetary easing by expanding its asset purchase program by JPY5 trillion to JPY55 trillion.

The dollar was lower against the Japanese yen but up against the Swiss franc with USD/JPY down 0.13% to hit 75.84, and USD/CHF higher by 0.16% to hit 0.8614.

The greenback was higher against its Canadian, Australian and New Zealand counterparts with USD/CAD up 0.23% to hit 0.9933, AUD/USD lower by 0.54% to hit 1.0671, and NZD/USD falling 0.30% to hit 0.8202.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 75.17.

The U.S. Bureau of Economic Analysis was scheduled to release its latest monthly report on consumer spending later Friday.