Dollar Rallies As Neighbors Scold Greece
The dollar was broadly stronger against other major currencies on Monday, supported by its safe haven appeal as global stocks tanked on renewed fears of a Greek default.
Analysts say that Greece’s days in the euro zone may be numbered. Its neighbors are growing more vocal about the inability of Athens to produce the meaningful debt reduction measures that were a condition of this year’s massive bailout.
Without funding Greece will run out of money in the next few weeks.
Greek PM George Papandreaou held discussions with euro zone officials and the International Monetary Fund, but no statement from the teleconference is forthcoming.
The dollar rose $1.3630 from last week’s low of $1.3936. Earlier in September, the dollar hit a 7-month peak of $1.3494.
The buck reached a fresh 7-month high against the sterling today, improving to $1.5630 from near $1.58.
The dollar clawed back last week’s losses and was within a cent of parity versus its Canadian counterpart.
Traders are also digesting a budget deficit reduction proposal offered by President Barack Obama that includes $1.5 trillion in tax increases mostly targeting the wealthy.
Obama sent the plan to the budget super committee, calling for a balanced approach to deficit reduction and saying that the plan would produce net savings of more than $3 trillion over the next decade.
Homebuilder confidence in the U.S. has unexpectedly seen a modest deterioration in the month of September, according to a report released by National Association of Home Builders on Monday.
The report showed that the NAHB/Wells Fargo Housing Market Index dropped to 14 in September from 15 in August. The modest drop surprised economists, who had expected the index to remain unchanged.
