Dollar On Firm Footing; Euro Hits 2-Month Low
he dollar continued to steam ahead Thursday, buoyed by jitters over the so-called U.S. fiscal cliff and Europe’s debt crisis, while the euro sank to a two-month low.
The ICE dollar index , a measure of the U.S. unit against a basket of six major rivals, rose to 80.930 from 80.781 in North American trade late Wednesday.
U.S. stock index futures hovered near unchanged Thursday. Wall Street plunged Wednesday, in part due to worries over whether lawmakers will manage to avert a combination of major spending cuts and tax hikes set to take effect on Jan. 1, potentially taking the economy back into recession. See: U.S. stock futures inch up; data, ECB in focus.
The euro remained under pressure, falling to $1.2734 from $1.2769 on Wednesday. The shared currency traded as low as $1.2719, according to FactSet, its lowest intraday level since Sept. 7.
The euro saw some support in Asian trade after Greece’s parliament narrowly passed a 13.5 billion-euro ($17.24 billion) package of additional austerity measures in the face of violent public protests. The measures are seen as a prerequisite for a further round of aid previously agreed by the country’s bailout lenders.
It’s clear “that there are still major problems in Greece reaching a solvent situation. It is consequently hard to get too positive about the euro, but the bad news should be largely in the market,” wrote strategists at Lloyds Bank in London.
The European Central Bank is widely expected to remain on hold as policy makers meet Thursday. Although ECB President Mario Draghi highlighted growing worries that Germany’s economy is beginning to feel the impact of the euro-zone debt crisis, he’s still more likely to talk up the potential use of the bank’s bond-buying program rather than lean toward additional rate cuts, the Lloyds strategists said.
The British pound fell to $1.5943 from $1.6004. The Bank of England is also expected to hold its fire Thursday.
Against the Japanese yen , the dollar bought ¥79.87 in recent action, down from ¥79.98 on Wednesday.
The Australian dollar traded at $1.0410, down slightly from $1.0419.
Marketwatch
