By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- The dollar traded higher against the euro on Tuesday, with risk on the backburner as the final vote to ratify Europe’s enlarged bailout fund looms.
The dollar index DXY -0.03% , which measures the greenback against a basket of six currencies, traded at 77.649, up from 77.581 in late North American trading on Monday.
“U.S. dollar sensitivity to risk aversion has increased more recently, and to achieve further gains it will require risk aversion to intensify, which in turn will require growth worries to deepen and the eurozone crisis to escalate,” said Credit Agricole currency strategists.
The euro EURUSD -0.07% , which rose the most against the dollar since January on Monday after France and Germany pledged to support Europe’s banks, traded at $1.3623, from $1.3644 late the previous session.
The euro area hasn’t yet fully approved the expanded European Financial Stability Fund, which is intended to support debt-laden members of the region, such as Greece. Slovakia is the last country to vote, with the decision expected Tuesday.
“The outcome is surrounded of huge uncertainty as the junior coalition party SaS has remained in talks with its coalition partners over the ratification of the European Financial Stability Fund 2.0.,” said the Credit Agricole strategists.
The British pound GBPUSD -0.20% changed hands at $1.5618, from $1.5671 Monday.
The dollar USDJPY -0.01% bought 76.66 yen, from ¥76.70 in late trading Monday when markets were closed for Sports Day.
On Tuesday, Japan released current-account data for August, which showed a surplus of 407.5 billion yen ($5.3 billion), a drop of 64.3% year-on-year. The August surplus came in below the ¥446.9 billion economists had been expecting, according to figures compiled by Dow Jones Newswires.
Sarah Turner is MarketWatch's bureau chief in Sydney.
