Forexpros – The U.S. dollar was steady against its major counterparts on Tuesday, as concerns over the ongoing debt crisis in the euro zone weighed on risk appetite after Standard & Poor’s placed the rating of the region’s bailout fund, the European Financial Stability Facility, on review.
During U.S. morning trade, the dollar was up against the euro, with EUR/USD slipping 0.09% to hit 1.3389.
S&P placed the triple A rated EFSF on negative watch and flagged a possible two notch downgrade, depending on its review.
The announcement came just a day after S&P put the long-term sovereign-debt ratings of 15 euro zone members, including the six European sovereigns that guarantee the EFSF’s financial obligations, on negative watch.
But the euro remained supported amid hopes that the warning would urge European leaders to press for an agreement on how to stabilize the euro zone and stem the spread of the debt crisis at this week’s key European Union summit.
Official data showing that German industrial orders for October posted their strongest rise since March 2010 also lent support.
The greenback was also higher against the pound, with GBP/USD shedding 0.25% to hit 1.5608.
The pound was hit after a report by the British Retail Consortium showed that retail sales posted the largest annual drop in like-for-like sales since May last month.
Meanwhile, mortgage lender Halifax also reported a 0.9% monthly fall in U.K. house prices in November, worse than the 0.1% dip expected by economists, although it said it expected the housing market to hold steady in the coming months.
Elsewhere, the greenback dipped against the yen but strengthened against the Swiss franc, with USD/JPY inching down 0.02% to hit 77.79, and USD/CHF advancing 0.62% to hit 0.9262.
In Switzerland, a report showed that consumer price inflation declined unexpectedly in November, easing for the second consecutive month as the strong franc weighed on prices.
The soft data sparked speculation that the Swiss National Bank may raise it minimum exchange rate target of 1.20 per euro to ward off deflation.
The greenback was lower against its Canadian counterpart but rose against its Australian and New Zealand cousins, with USD/CAD sliding 0.24% to hit 1.0137, AUD/USD dropping 0.47% to hit 1.0223 and NZD/USD sliding 0.22% to hit 0.7784.
Earlier in the day, the Bank of Canada left its benchmark interest rate unchanged at 1% in a widely expected decision, saying that the weaker external economic outlook was expected to weigh on domestic growth.
Also Tuesday, official data showed that the number of new building permits issued in Canada rose significantly more-than-expected in October.
A separate report showed that Canada’s Ivey purchasing managers’ index rose more-than-expected in November.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched down 0.03% to hit 78.67.
Also Tuesday, Eurostat said that the euro zone’s gross domestic product expanded in line with expectations in the third quarter, growing by 0.2%, unchanged from an initial estimate.
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