Forexpros – The dollar rose against major world currencies on Monday after investors snapped up nicely priced positions in wake of last week’s selloff that came when European Union leaders announced tough new measures to battle the debt crisis.
In Asian trading on Monday, EUR/USD was trading down 0.24% at 1.2631.
The dollar tanked last week on stronger-than-expected measures taken by E.U. leaders to battle the debt crisis.
The European Union gave its rescue fund, the European Stability Mechanism, approval to recapitalize banks directly as well as the green light to buy government bonds directly to ease credit conditions in troubled countries.
E.U. policymakers also agreed to launch a supervisory organization for eurozone banks by the end of this year.
The news sparked widespread optimism that European leaders are taking greater strides to firewall and extinguish the debt crisis.
However, the eurozone is set to release unemployment figures later Monday, and fears that jobless rates may rise while other upcoming indicators such as manufacturing numbers will come in weak sent investors back to the safety of the U.S. dollar.
Meanwhile on Friday, the U.S. will release its June jobs report, and fears that the numbers will disappoint there as well sent the dollar rising.
The dollar often serves as a safe-harbor investment amid uncertainty.
Japanese business sentiment figures hit the wire earlier, though the markets shrugged them off after the dollar fell against the yen when the news broke.
The Bank of Japan early Monday reported that its Tankan Manufacturing index rose to a seasonally adjusted -1 in the second quarter from -4 in the preceding quarter.
Analysts were forecasting the Tankan Manufacturing index to remain unchanged at -4.
The index measures sentiment among large Japanese manufacturers.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.28% and trading at 1.5659.
The U.S. currency was up against the yen, with USD/JPY trading up 0.03% at 79.83, and up against the Swiss franc, with USD/CHF trading up 0.27% at 0.9514.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.20% 1.0188, AUD/USD down 0.11% at 1.0226 and NZD/USD down 0.01% at 0.8012.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.21% at 81.89.
Later Monday in the U.S., the Institute for Supply Management will release its Manufacturing Purchasing Managers Index.
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