Dollar Steadies Versus Euro After Greek Rescue
The dollar was little changed on Friday, finding its footing against the euro after seeing big losses on yesterday’s announcement of a major rescue package for Greece.
The 109 billion euro plan eased short-term concerns that the crisis may spread to larger economies. Investors can exchange existing bonds for new bonds with lower interest rates and longer maturities, resulting in “selective default.”
The plan includes measures to take pressure off of other big debtors like Ireland and Portugal.
With no first-tier economic news from U.S. to consider, focus remained across the Atlantic, where data showed Euro zone industrial orders grew at a faster than expected rate in May, following a decline in the previous month.
Industrial new orders increased 3.6 percent month-on-month, after dropping 0.1 percent in April. Economists had forecast orders to grow just 0.8 percent.
Also, the Ifo Institute’s survey showed that German business sentiment worsened in July. The business climate index based on the survey slid to 112.9 in July from 114.5 in June. Economists had expected a reading of 113.7.
The dollar was steady near $1.4350, having dropped sharply from Monday’s 4-month peak of $1.3836.
The dollar was stuck near $1.63 versus the sterling, down from a recent multi-month peak near $1.5750.
The buck fell no further versus the yen after hitting a 4-month low of Y78.20 in the previous session.
Early gains helped the dollar rise from yesterday’s 3-year low against its Canadian counterpart. The buck improved to C$0.95 after Canada’s annual inflation rate dropped in May.
The annual rate of consumer price inflation rate was 3.1 percent in June, down from 3.7 percent in May, according to Statistics Canada.
Canadian retail sales edged slightly higher on May, but at a slower pace compared to the previous month, amid declining receipts at auto dealerships and grocery stores.
Retail sales edged up 0.1 percent in May to C$37.5 billion, after rising by 0.3 percent the month before. May’s result was better than expected, as economists predicted slumping retail sales would wipe out April’s increase.
