FRX: Dollar remains higher vs. rivals on dim E.Z. outlook
Forexpros - The U.S. dollar remained broadly higher against its major counterparts on Tuesday, as concerns over the effects of the euro zone’s debt crisis on the region’s growth outlook weighed on demand for riskier assets.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.51% to hit 1.3148.
The single currency came under pressure after Eurostat reported that the euro zone’s gross domestic product shrank by a seasonally adjusted 0.3% in the fourth quarter, in line with expectations and unchanged from a preliminary estimate.
Annualized GDP contracted at a rate of 0.7%, also in line with expectations and unrevised from an initial estimate.
The data fuelled concerns over the outlook for global growth, coming one day after Chinese Premier Wen Jiabao said his government will target expansion of 7.5% in 2012, the lowest GDP target in eight years.
Investors also remained jittery ahead of the March 8 deadline for Greece’s private creditors to sign on to a EUR106 billion debt swap deal, a requirement for Athens to tap a recently approved EUR130 billion bailout fund.
The greenback was also higher against the pound, with GBP/USD falling 0.48% to hit 1.5790.
Earlier in the day, a report by mortgage lender Halifax showed that U.K. house prices fell unexpectedly in February after rising in January and continuing the mixed monthly pattern seen over the past year.
The data came after a report by the British Retail Consortium showed that total retail sales rose at an annualized rate of 2.3% in February, after a 2.1% gain the previous month.
The greenback was lower against the yen but higher against the Swiss franc, with USD/JPY dropping 0.58% to hit 81.08 and USD/CHF adding 0.48% to hit 0.9168.
Government data showed earlier that average cash earnings in Japan were unexpectedly flat in January, after a 0.1% rise the previous month.
Meanwhile, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.44% to hit 0.9989, AUD/USD declining 0.81% to hit 1.0585 and NZD/USD sliding 0.81% to hit 0.8139.
The Reserve Bank of Australia left its benchmark interest rate unchanged at 4.5% in a widely expected decision earlier, but failed to outrule the possibility of further rate cuts if global economic conditions weaken going forward.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.37% to hit 79.72.
The U.S. was also preparing for the Super Tuesday primaries later in the day, in which voters in 10 U.S. states are to choose a Republican presidential candidate.
