By Deborah Levine and Lisa Twaronite, MarketWatch
NEW YORK (MarketWatch) — The dollar edged lower on Monday, as investors appeared to take a more sanguine view of Greece’s sovereign-debt woes and keep an eye on gyrations in U.S. stocks.
The euro EURUSD +0.32% rose to $1.4382 from $1.4354 in late North American trading on Friday. See real-time currency quotes and tools.
The dollar index DXY -0.23% , which measures the performance of the U.S. unit against a basket of six currencies, turned down to 74.651 from 74.801 late Friday.
The British pound GBPUSD +0.45% rose to $1.6307, from $1.6242.
The Australian dollar AUDUSD +0.23% bought $1.0571, from $1.0570 Friday, in thin trading. Markets in Australia were closed for a holiday Monday.
The dollar pared losses as U.S. stocks gave up some of their gains after the Dow Jones Industrial Average DJIA +0.10% touched 12,000. See story on U.S. stocks.
The greenback had been stronger during the Asian session as equities there slipped due to downbeat lending data from China and traced losses in U.S. stocks Friday. Read more about Asia Markets.
“The dollar was firm in the European session while equity futures were lower but optimism typical of a Monday morning quickly bashed the dollar’s strength over the head,” said Andrew Wilkinson, senior market analysts at Interactive Brokers.
Analysts also noted an apparent confidence that European politicians, the European Central Bank and Greece will find a solution to Athens’s debt problems. Last week the euro lost 1.4% as officials displayed discord over what a solution should look like. Read more on euro, Greece.
“Credit investors are treating the negotiations for Greece’s latest financial aid as if a default is an inevitability,” said Kathleen Brooks, research director at Forex.com.
Even so, bonds of Greece and other peripheral countries under the microscope fell, she said. Even Italy’s bonds are suffering, in part linked to referendums coming up.
“Italy has a huge public debt burden so political instability at this juncture will be punished by markets,” she said. “If sovereign fears spread to Italy then the euro may get pounded, so watch out for headlines on election results later today.”
On Tuesday, the finance ministers of the 17 countries using the euro currency are meeting and are expected to support Greece and pledge to do everything necessary to secure the stability of their common currency, according to Dow Jones Newswires.
European Union leaders are expected to decide next week whether to offer Athens a new package of financial help.
Japanese data
The Japanese yen was little changed after an unexpected drop in Japanese core machinery orders, which are considered a leading indicator of corporate capital spending. Against the yen, the dollar USDJPY -0.19% turned down to ¥80.24, from ¥80.35 late Friday.
Orders slipped 0.2% in April from the previous year and 3.3% from March, while economists surveyed by Dow Jones Newswires had expected a 1.2% rise from March. Read report on Japanese machinery-order data.
“Machine orders are a reliable predictor of capital spending over the forthcoming three to six months and with the inability of the economy to show signs of post-trauma rebound, investors looked to the Bank of Japan’s June meeting in hopes for further stimulus,” Wilkinson said.
The Bank of Japan is due to release its monetary policy statement on Tuesday at the end of a two-day meeting.
