Dollar surges as Greek Talks stretch on
The dollar strengthened on Monday as discussions between Greece’s leaders and eurozone finance ministers appeared to yield little progress, stoking worries about a Greek exit from the eurozone, which supported the buck against its main rival.
The ICE U.S. dollar index DXY, +0.26% , a measure of the dollar’s strength against a basket of six rivals, was up 0.2% at 94.9850.
After finishing last week lower against the currencies of every industrialized country except for New Zealand, the dollar was broadly higher against Group of 10 and emerging-market currencies.
One notable exception was the pound, which rose to its highest level of the year against the dollar in mid-morning trade as it continued to benefit from the Conservative party’s victory in last week’s U.K. general election.
Greece has begun processing a payment of about €750 million ($836.8 million) to the International Monetary Fund Tuesday, according to media reports citing Greek government officials. But talks between Greek officials and European Union finance ministers haven’t pushed the two sides closer to a deal.
The euro was drifting lower against the greenback with options-related stop-loss selling orders giving the pair an extra downward push with many investors skeptical about any agreement emerging from the meeting of eurozone finance ministers.
The dollar USDJPY, +0.24% was almost unchanged at ¥119.94, compared with ¥119.84 late Friday; the euro EURUSD, -0.5890% traded at $1.1158, compared with $1.1223; the pound GBPUSD, +0.9516% traded at $1.5566, compared with $1.5442; the Canadian dollar USDCAD, +0.3231% traded at 82.83 cents, compared with 82.85 cents; one dollar was worth 15.24 Mexican pesos USDMXN, +1.0823% compared with 15.12 pesos Friday.
The U.S. labor market conditions index for April came in below expectations, but did little to move the market. With no other important data expected Monday, investors looked ahead to the job openings and labor turnover survey, an important reading on the state of the U.S. labor market, as well as retail sales and the producer price index, expected later in the week.
Friday’s jobs report was strong enough to briefly relieve the pressure on the dollar, but didn’t stop it from finishing lower against the euro for the fourth straight week.
“At this stage we’re going to have to see further signs of strength in the economy to really move the needle in terms of when the Fed might raise interest rates,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Higher interest rates would increase the yield on dollar-denominated deposits, making the U.S. currency more attractive to foreign investors, analysts said.
Source: MarketWatch
