FRX: Broadly weaker dollar hits 6-week low vs. euro
Forexpros - The U.S. dollar hit a six-week low against the euro on Tuesday and was broadly lower against the other major currencies as investor confidence was boosted by hopes that Greece’s plan to buy back debt will succeed.
During European afternoon trade, the dollar fell to a six-week low against the euro, with EUR/USD up 0.33% to 1.3096.
The single currency found support after Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.
The buyback is a way to reduce Greece’s debt load and needs to be completed before the International Monetary Fund can release its share of the next tranche of Greece’s bailout funds.
The greenback was close to a one-month low against the pound, with GBP/USD rising 0.17% to 1.6118.
The pound remained supported after data showed that construction sector activity in the U.K. unexpectedly declined to a three month low in November.
The greenback was lower against the yen, with USD/JPY down 0.44% to 81.88, but edged higher against the Swiss franc, with USD/CHF inching up 0.09% to 0.9265.
The yen strengthened after Monday’s weak U.S. manufacturing data and ongoing concerns over the U.S. fiscal cliff enhanced the safe haven appeal of the currency.
The greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.13% to 0.9938, AUD/USD up 0.59% to 1.0481 and NZD/USD climbing 0.54% to 0.8253.
The Australian dollar turned higher earlier after the Reserve Bank of Australia cut its benchmark interest rate to 3% from 3.25% in a widely anticipated decision.
Commenting on the decision, RBA Governor Glenn Stevens said the Australian dollar remains “higher than might have been expected” given lower export prices and a weaker global outlook.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% to 79.64.
European Union finance ministers were holding talks in Brussels on Tuesday, to discuss banking supervision in the euro zone.
