FRX: Dollar firms up ahead of Greek austerity vote
Forexpros - The U.S. dollar regained ground against the other major currencies on Wednesday, as fresh worries over U.S. fiscal policy and uncertainty ahead of a Greek parliamentary vote on austerity supported safe haven demand.
During European afternoon trade, the dollar rose to a two-week high against the euro, with EUR/USD down 0.40% to 1.2762.
Sentiment on the single currency was hit by uncertainty ahead of a Greek parliamentary vote later in the day, on an austerity bill necessary for Athens to secure its next installment of bailout funds.
Meanwhile, worse-than-forecast economic data out of the euro zone added to concerns that the bloc’s economy is weakening.
German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline, while industrial production in Spain tumbled 7% in September, almost double the decline expected by economists.
Elsewhere, official data showed that retail sales on the euro zone fell by 0.2% in September, compared to expectations for a 0.1% decline.
The dollar was broadly weaker earlier in the session as President Barack Obama’s re-election for a second term was seen as boosting the chances that the Federal Reserve’s policy of quantitative easing will remain in place.
The greenback was higher against the pound, with GBP/USD slipping 0.11% to 1.5976.
Elsewhere, the greenback was lower against the yen, with USD/JPY shedding 0.30% to trade at 80.11, but was up against the Swiss franc, with USD/CHF rising 0.28% to 0.9455.
The Swiss National Bank said earlier that foreign currency reserves fell to CHF424.4 billion last month, from a record CHF429.5 billion in September, indicating that the central bank has reduced the scale of currency market operations to maintain the minimum exchange rate of 1.20 francs per euro.
Separately, official data showed that Swiss consumer price inflation ticked up 0.01% in October, compared to expectations for a 0.3% increase.
The greenback was little changed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.05% to 0.9926, AUD/USD dipping 0.01% to 1.0431 and NZD/USD edging up 0.06% to 0.8278.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.28% to 80.94.
Later in the day, European Union Commissioner for Economic and Monetary Affairs Olli Rehn was to release the EU’s autumn economic forecasts.
