Forexpros – The U.S. dollar traded lower against its major counterparts Monday, as risk sentiment was sparked after Greece wrapped up an auction to settle the payout on credit default swaps and the Federal Reserve made cautious statements on the world’s number one economy.
During U.S. afternoon trade, the dollar was down against the euro, with EUR/USD advancing 0.55% to hit 1.3246.
Greece’s old government bonds were valued at 21.5% of their face value, meaning that CDS contracts will pay out 78.5 cents in the euro.
The CDS auction was triggered after Greece’s private sector creditors were forced to exchange their bonds in a debt swap that cut the value of Greek debt holdings by 53.5% earlier this month.
Elsewhere, the euro zone’s permanent bailout fund, the European Financial Stability Facility announced earlier that its first offering of 20-year bonds will be conducted at a lower price than initially planned, further boosting market sentiment.
The greenback dropped against the euro as Bank of New York Fed President William Dudley issued cautious words about U.S. economic growth.
Dudley stated,”signs that the economy is improving, do not dispel meaningful risks to growth including higher gasoline prices, fiscal cutbacks and a weak housing market.” The U.S. dollar was lower against the pound, with GBP/USD adding 0.37% to hit 1.5902.
The greenback was weaker against the yen and the Swiss franc, with USD/JPY slipping 0.13% to hit 83.33 and USD/CHF giving back 0.49% to hit 0.9110.
Elsewhere, the greenback slid against its Canadian, Australian and New Zealand cousins, with USD/CAD losing 0.37% to hit 0.9880,AUD/USD gaining 0.19% to hit 1.0608 and NZD/USD climbing 0.22% to hit 0.8260.
In Canada, official data showed that wholesale sales declined unexpectedly in January, falling 1.0% and erasing the previous month’s 0.9% gain.
Earlier Monday, Reserve Bank of Australia Governor Glenn Stevens said that the euro zone’s debt problems were still a risk to the global economy, but remained upbeat on the outlook for China and the rest of Asia.
Stevens also said Australia’s overall recent economic performance was “not too bad” despite the pressures of the strong domestic currency, but said that only increased productivity could boost economic growth.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.48% to hit 79.69.
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