Forexpros – The U.S. dollar was broadly higher against its major counterparts on Wednesday, as mounting concerns over the crisis in the euro zone boosted demand for the safe haven greenback, while markets eyed a flurry of U.S. data.
During European afternoon trade, the dollar was sharply higher against the euro, with EUR/USD tumbling 0.91% to hit 1.3382.
Germany’s Treasury auctioned just EUR3.64 billion of 10-year government bonds with the average yield set at 1.98% in an auction earlier. Total bids for German debt fell short of the maximum amount available by 35%, the worst demand on record.
The auction came after preliminary data showing that the euro zone manufacturing purchasing managers’ index slumped to the lowest level since July 2009 in November, falling to 46.4 from 47.1 in October.
A separate report showed that industrial orders in the euro zone fell significantly more-than-expected in September.
Earlier Wednesday, sentiment on the single currency was hit following reports saying that Belgium and France were in fresh talks over an existing rescue deal for troubled lender Dexia, sparking concerns that France would have to take a larger part in the bailout, which could have implications for the country’s AAA credit rating.
The greenback was also higher against the pound, with GBP/USD shedding 0.43% to hit 1.5563.
In the U.K., the minutes of the Bank of England’s November policy meeting showed that policymakers saw little merit in “fine tuning” their stimulus program and voted unanimously to maintain the central bank’s key interest rate at 0.5% and the size of its asset purchase program at GBP275 billion.
Meanwhile, the greenback was stronger against the yen and the Swiss franc, with USD/JPY adding 0.30% to hit 77.19 and USD/CHF rising 0.51% to hit 0.9189.
In addition, the greenback posted strong gains against its Canadian, Australian and New Zealand cousins, with USD/CAD rising 0.48% to hit 1.0432, AUD/USD falling 1.09% to hit 0.9730 and NZD/USD falling 0.67% to hit 0.7421.
Earlier Wednesday, a report showed that China’s HSBC preliminary manufacturing PMI fell to a 32-month low in November, adding to fears over a ‘hard landing’ in the world’s second largest economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 0.75% to hit 78.98.
Later Wednesday, the U.S. was to publish a string of economic data ahead of Thursday’s Thanksgiving holiday, including a government report on durable goods orders, the weekly report on initial jobless claims as well as data on crude oil stockpiles, inflation, personal income and personal spending.
Meanwhile, the University of Michigan was to release revised data on inflation expectations and consumer sentiment.
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