Dollar Extends Rally Versus Euro
The dollar touched its highest in three weeks versus the slumping euro on Monday, supported by mounting concerns that Europe’s sovereign debt crisis has reached a dangerous new stage.
Speculation that Greece may be preparing its exit from the euro monetary union was quickly dismissed by officials in Athens, but the default worries led S&P to once again downgrade its rating on the nation’s debt.
European officials acknowledged Greece may need revised bailout terms to avoid default or restructuring.
“We think that Greece does need a further adjustment programme,” said Luxembourg PM Jean-Claude Juncker, chairman of the eurogroup of finance ministers.
The absence of economic data from the U.S. allowed the dollar to extend its comeback from last week’s 3-year lows against a basket of major counterparts.
The dollar rose to $1.4253 against the euro, moving further from last week’s 17-month low near $1.50.
Against the sterling, the dollar edged to $1.6280 before easing back to $1.6350.
There was little movement against the yen, as the dollar held near Y80.50.
Choppy trading left the buck near C$0.9650 against its Canadian rival.
In economic news from around the globe, Germany’s exports grew more than expected in March to a record high, figures published by the Federal Statistical Office showed Monday.
At EUR 98.3 billion, exports reached its highest level in March since records began in 1950. The previous all-time high of exports, which totaled EUR 88.8 billion, was observed in April 2008.
French business confidence dropped to 107 in April from 110 in March, survey results from the Bank of France revealed. Economists had expected it to remain unchanged at 110 in April.
British house prices dipped 1.4 percent on a monthly comparison in April, after remaining flat in March, data from the Lloyds Banking Group Plc’s Halifax division showed.
Members of the Bank of Japan’s monetary policy committee said that Japan’s economy continues to be under heavy downward pressure following the March 11 earthquake and tsunami, minutes from the bank’s meeting on April 6 and 7 revealed on Monday.
