Forexpros – The U.S. dollar remained broadly higher against its major counterparts on Tuesday, as Greece’s call for a referendum on its latest bailout deal boosted demand for the safe haven greenback.
During U.S. morning trade, the dollar was sharply higher against the euro, with EUR/USD plunging 1.51% to hit 1.3647.
Risk appetite was hit by fears that Greece could move closer to a sovereign default, increasing the risk of contagion in global financial markets, if the vote on the bailout deal is rejected.
Commenting on the Greek vote, Eurogroup Chairman Jean-Claude Juncker said it had piled “great nervousness and insecurity” onto an already very insecure situation for the euro zone economy.
The greenback was also up against the pound, with GBP/USD tumbling 0.91% to hit 1.5939.
Earlier in the day, official data showed that the U.K. economy grew slightly more-than-expected in the third quarter as the service sector expanded, but a separate report showed that manufacturing activity in the U.K. fell to a 28-month low in October.
The greenback was also higher against the yen, while the impact of Monday’s intervention by Japan to curb the appreciation of the yen eased, with USD/JPY rising 0.31% to hit 78.39.
In addition, the greenback posted strong gains against the Swiss franc, with USD/CHF jumping 1.82% to hit 0.8929.
Industry data showed earlier that Swiss manufacturing activity declined more-than-expected in October, contracting for the second successive month, as the slowing global recovery weighed on the sector, which has already been hit by the strong franc.
Elsewhere, the greenback was sharply higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD surging 1.65% to hit 1.0173, AUD/USD plummeting 2.05% to hit 1.0314 and NZD/USD down 1.46% to hit 0.7951.
The Aussie’s losses came after the Reserve Bank of Australia cut its official cash rate by 0.25% to 4.5% earlier, citing a moderation in the pace of global growth.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, advanced 1.30% to hit a two-week high of 77.64.
Also Tuesday, data showed that Chinese manufacturing activity dropped to its lowest level since February 2009 in October, adding to concerns over the global economic outlook.
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