RTTN:Dollar Pauses After Hitting Multi-Month Highs
(RTTNews) - The dollar leveled off Monday morning after strong gains last week, as traders continued to express anxiety over the European debt situation and global growth outlook.
Markets have been rattled by speculation that Greece will be unable to meet its debt obligations. It is feared that a Greek default will set off a chain effect among other euro zone nations that are coping with unsustainable high borrowing costs.
"Greece needs to meet the agreed fiscal targets and implement the agreed structural reforms to fulfill the conditionally and ensure funding from its partners," said Europe's economy commissioner Olli Rehn.
A battle appears to be shaping up within German and among officials at the European Central Bank whether to contain the debt crisis by buying billions in bonds from Italy and Spain.
The dollar touched a 7-month high of $1.3494 versus the euro, but eased back to $1.3630 approaching 8 am ET.
Overnight the dollar hit a two-month high of $1.5758 versus the sterling, then gave back a penny to $1.5860.
The dollar briefly edged above parity versus its Canadian counterpart, and nudged above CHF 0.89 versus the Swiss franc for the first time since May.
Weakness was pronounced against the yen, which continues to find support as a safe haven currency. The buck slipped to Y77, edging back toward a record low Y75.93 from back in August.
The Organization of the Petroleum Exporting Countries slashed its world oil demand growth forecast citing weaker-than-expected driving season in the U.S. and the ongoing sluggish economic performance in the OECD.
Dallas Federal Reserve President Richard Fisher is due to speak on monetary policy in a global context to NABE annual meeting in Dallas at 5 pm ET.
Looking ahead to this week's economic calendar from the U.S., traders are expected to pay attention to the results of the New York and Philadelphia Federal Reserves' manufacturing surveys for September, the Federal Reserve's industrial production report, the Commerce Department's retail sales report for August and the weekly jobless claims report.
Additionally, the preliminary reading of the Reuters/University of Michigan's consumer sentiment survey and the producer and consumer price inflation reports for August may garner some attention. The Labor Department's import and export prices report for August, the business inventories report for July, the Treasury Budget for August, a Fed speech and The Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
