The U.S. dollar gained versus the euro and British pound on Tuesday, finding support amid ongoing worries about debt problems in the euro zone after Fitch Ratings warned that Portugal remained vulnerable to a downgrade.
The euro changed hands at USD1.3581, down from USD1.3636 in North American activity late Monday.
The dollar index, which measures the U.S. unit against a trade-weighted basket of six major currencies, rose to 80.629, up from 80.440 late Monday.
The Pound was the worst performer among major currencies for a second day, dropping to a one-week low against the dollar during, and the euro sank as much as 1.2% against the yen and more than 0.5% against the dollar. The common currency also weakened against the Swiss franc, falling to the lowest level in two weeks, though there were no signs of intervention by the Swiss National Bank.
The U.K. global goods trade deficit widened unexpectedly in January to its largest level since August 2008 due to weaker exports. Meanwhile, the rise in U.K. house prices slowed sharply in February as supply outpaces demand, the Royal Institution of Chartered Surveyors said Tuesday.
The greenback bought JPY89.90, compared to JPY90.29 late Monday.
Market expectation
Worries over fiscally stressed European countries increased in the wake of new comments from rating agencies.
The euro is headed to the USD1.25 level, while sterling will keep drifting lower on worries about the U.K.'s budget deficit, said analysts.
EURUSD post-fixing slippage brings the pair back to USD1.3565 area now after topping out at USD1.3593, the area of Asian lows, traders note. Flows still muted but backdrop of a slightly softer Dow offering the best trading cue on the day, traders say.
Pound lows extended to USD1.4936 but rate appears to be well cushioned between USD1.4940/35, traders have suggested. Technical traders note this support and look for recovery, noting resistance at USD1.5000/10 (USD1.5006 76.4% USD1.5027/1.4936). Above here and rate can push back toward earlier recovery highs at USD1.5027, with offers noted to USD1.5030/40 with stops noted above. A break here opens a move toward USD1.5065/70 ahead of USD1.5095/00. On the downside, stops noted on a break now of USD1.4930, which if triggered exposes USD1.4900 ahead of stronger support area between USD1.4885/80.
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This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.About the Author
Legal disclaimer and risk disclosure
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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