Dollar index holds gains, Greece remains in focus

Investing.com –

Investing.com – The dollar held gains against the other major currencies on Tuesday, as concerns over a potential Greek exit from the euro zone continued to dominate market sentiment.

EUR/USD erased earlier losses and added 0.14% to 1.1310, supported by rumors the European Commission could propose a six-month extension to Greece’s bailout program, which is due to end on February 28.

The euro has been under pressure since Greek Prime Minister Alexis Tsipras said over the weekend that he will deliver on pre-election pledges to roll back austerity measures and rejected an international bailout extension.

Tsipras said he is seeking a new agreement to cover Greece’s funding needs until June.

Earlier Tuesday, official data showed that French industrial production rose 1.5% in December, beating expectations for a 0.4% gain. November’s figure was revised to a 0.2% slip from a previously estimated 0.3% fall.

The pound edged higher against the dollar, with GBP/USD up 0.08% to 1.5228.

In a report, the Office for National Statistics said U.K. manufacturing production rose 0.1% in December, compared to expectations for a 0.1% downtick. November’s figure was revised to a 0.8% increase from a previously estimated 0.7% rise.

On an annualized basis, manufacturing production rose at rate of 2.4% in December, above expectations for a gain of 2.0%, after rising at a rate of 3.0% in the previous month.

The report also showed that industrial production fell by 0.2% in December, compared to expectations for a 0.1% gain, after declining 0.1% in November.

Elsewhere, USD/JPY advanced 0.54% to 119.28, while USD/CHF was almost unchanged at 0.9242.

In Switzerland, official data earlier showed that consumer price inflation slipped 0.4% last month, confouding expectations for a 0.6% decline, after a 0.5% fall in December.

The Australian and New Zealand dollars remained lower, with AUD/USD retreated 0.53% to 0.7759 and NZD/USD edging down 0.20% to 0.7395.

The Aussie found some support earlier, after the National Australia Bank reported that its business confidence index rose to 3 in January from a reading of 2 the previous month.

Separately, the Australian Bureau of Statistics said the house price index rose by 1.9% in the fourth quarter of 2014, exceeding expectations for a 1.8% gain. The third quarter’s figure was revised to a 1.4% rise from a previously estimated 1.5% increase.

Meanwhile, the Canadian dollar pushed lower, with USD/CAD up 0.47% to 1.2525.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.10% to 94.79.

Also Tuesday, official data showed that China’s consumer price index rose by an annualized 0.8% in January. It was the weakest reading since November 2009, adding to pressure on Beijing to step up measures to bolster growth in the world’s second-largest economy.

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