Swiss franc climbs to all-time high against greenback
By Lisa Twaronite, Greg Morcroft and William Spain, MarketWatch
CHICAGO (MarketWatch) — The dollar fell Friday as U.S. Treasury yields dropped and investors digested the latest round of U.S. economic data.
The government reported that personal income and spending increased 0.4% in April. The rise in spending was the smallest in three months. Read more about consumer spending.
The yield on 10-year Treasury notes dropped as low as 3.05%, its lowest level since Dec. 7, underscoring market perceptions that the U.S. economic recovery has hit a slow patch.
The dollar index DXY -0.56% , which measures the U.S. unit against a basket of six major currencies, fell lately to 75.06, from 75.598 late Thursday.
Despite lingering fears about European sovereign-debt woes, particularly those of Greece, the euro EURUSD +0.7994% nudged up to $1.4232 from $1.4128 in late North American trading Thursday. See real-time currency quotes and tools.
“We expect there to be political will to find sufficient measures to close the funding gap, enable a disbursement of aid and avoid an early default,” said Sue Trinh at RBC Capital Markets, in reference to Greece.
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“The realization of such could see a further squeeze” in the euro, she said in a note to clients. “Until then, choppy trade will persist; note that liquidity will be thinned” by U.K. and U.S. market holidays on Monday.
“A potentially lethal week for Europe’s single currency is heading to a positive end for the unit as fears of a crash in its fortunes have lost momentum,” said Andrew Wilkinson, an analyst at Interactive Brokers. “As the biggest bond holder in Athens, the European Central Bank has a vested interest in timely and wholesome debt repayment, which is why it states that restructuring is not an option.”
Further, “as the U.S. strolls into a long vacation weekend, behind the scenes discussion in Europe may yet result in a softening of the hardline at the ECB and is shielding the single currency from a worse outcome,” he added.
Also Friday, the dollar hit an all-time low against the Swiss franc, falling to 85.34 centimes on the EBS trading platform, and was last buying 85.77 centimes, down 0.9%.
Against the Japanese yen, the dollar USDYEN -0.1844% bought ¥81.07, down from ¥81.33 late Thursday.
Currency markets mostly shrugged off data showing Japan’s core consumer price index rose in April for the first time in more than year. CPI rose 0.6% from the same month a year ago, matching the median forecast in a poll of 12 economists surveyed by Dow Jones and Nikkei. Core CPI excludes fresh food, but includes energy.
Rounding out trading in the dollar, the British pound GBPUSD +0.1525% rose to $1.6425 from $1.6385 late Thursday, as the Australian dollar AUDUSD +0.5832% reached $1.0684 from $1.0630.
