By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — The dollar strengthened against the euro on Tuesday, amid fresh worries about Europe’s debt-crisis.
The dollar traded relatively flat against the yen, a day after Japanese officials intervened in currency markets to weaken the yen.
The dollar index DXY +0.22% , which measures the greenback against a basket of six rival currencies, rose to 76.536, from 76.243 in North American trade late Monday.
The euro EURUSD -0.38% fell to $1.3824, from $1.3908 in North American trade late Monday.
Fresh concerns about the euro-zone emerged following reports late Monday that Greek Prime Minister George Papandreou would hold a referendum on a new European Union aid package, to give voters a say i whether they support it or not.
Strategists at Credit Agricole said the euro has unwound a significant part of recent gains on rising doubts about the euro zone rescue package - which failed to prevent a jump in Italian and Spanish bond yields on Monday - while the referendum calls by Papandreou adds further pressure.
“Doubts had been creeping in due to the lack of detail in the rescue package including, the lack of specifics on the leveraging of the European Financial Stability Facility bailout fund,” the strategists said.
“The pattern appears to have followed the reaction to previous European Union announcements to stem the crisis, namely short lived euphoria followed by a sell-off in risk assets. The euro is likely to struggle further over the near term,” they added.
Against the yen, the dollar USDJPY -0.05% traded at ¥78.165, from ¥78.05 in North American trade late Monday.
The euro EURJPY -0.42% bought ¥108.22, from ¥108.56 in North American trade late Monday.
Japan intervened in currency markets for the third time this year on Monday, in a bid to weaken the yen and ease the impact the high currency bears on the export-dominant economy. Read analysis on the yen intervention
Elsewhere in Asia, the Reserve Bank of Australia cut the official cash rates by 25 basis points to 4.5%.
The Australian dollar AUDUSD -1.02% traded at $1.0491 following the announcement, and bought $1.0449 in recent activity.
Virginia Harrison is a MarketWatch reporter based in Sydney.
