Dollar gains as European economic woes mount
- November 10, 2012
- Posted by: Pankaj
- Category: Uncategorized
In U.S. trading on Friday, EUR/USD was down 0.26% at 1.2714.
French industrial production fell 2.7% in September, way more than market calls for a 1% decline, and off from a 1.9% gain in August.
In Italy, industrial production dropped 1.5% in September, slightly worse than expectations for a 1.4% drop and way below a 1.7% increase in August.
The data sent the euro falling against the greenback as did Greek financing concerns, which sparked a risk-off trading session that was broadly bullish for the U.S. currency.
Athens hopes to tap a EUR31.5 billion tranche of aid after pushing through austerity measures that aim to narrow deficits and appease creditors.
Yet the country’s parliament must still approve its budget for next year, with voting scheduled for Nov. 11.
Lawmakers must approve a budget to tap rescue funding packages.
The dollar, meanwhile, continued to see safe-haven demand over growing fears the U.S. may drive over a fiscal cliff next year.
At the end of this year, tax breaks are set to expire at the same time cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could send the country into a recession next year if left unchecked by Congress.
Fears Democrats and Republicans will engage in partisan bickering and fail to compromise continued to quell appetite for risk on Friday, which was bullish for the dollar.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.52% at 1.5901.
The dollar was down against the yen, with USD/JPY trading down 0.05% at 79.43 and up against the Swiss franc, with USD/CHF trading up 0.27% at 0.9484.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.04% at 0.9998, AUD/USD down 0.12% at 1.0392 and NZD/USD trading down 0.03% at 0.8146.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% at 81.10.