Forex Focus - The U.S. dollar traded mixed against its major counterparts Monday, as investors remained cautious ahead of a meeting of the region’s finance ministers due to begin later in the day.
During U.S. afternoon trade, the dollar moved lower against the euro, with EUR/USD up 0.19% to hit 1.2309.
Single currency sentiment remained under pressure as European Central Bank President Mario Draghi reiterated comments made last week following the bank’s decision to cut its benchmark interest rate to a record low of 0.75%, saying that economic indicators for the second quarter point to weakening growth in the euro zone.
Speaking before the European Parliament in Brussels, Draghi added that inflation will most likely decline further in 2012 and fall below 2% in 2013.
The comments came as the yield on Spain’s 10-year government bonds climbed to 7.11% earlier, well above the 7% threshold, widely seen as unsustainable, ahead of a meeting of euro zone finance ministers later Monday.
Euro zone officials were expected to discuss a plan announced last month and designed to help the region’s indebted countries and their struggling banking systems.
The euro tumbled to a two-year low against the greenback earlier in the day, as concerns over the outlook for global growth persisted after disappointing economic reports from the U.S. and China.
Meanwhile, the greenback was lower against the pound, with GBP/USD adding 0.23% to hit 1.5524.
Sterling’s gains were limited after the Bank of England said last week that “the weaker outlook for U.K. output growth means that the margin of economic slack is likely to be greater and more persistent.”
The comments came after BoE policymakers voted to increase its quantitative easing program by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
Elsewhere, the greenback was modestly lower against the yen and the Swiss franc, with USD/JPY dipping 0.1% to trade at 79.60 and USD/CHF shedding 0.04% to hit 0.9770.
However, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.05% to hit 1.0201, AUD/USD dropping 0.23% to hit 1.0190 and NZD/USDretreating 0.22% to hit 0.7961.
The commodity-linked currencies were hit by concerns over a deeper-than-expected slowdown in China.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13%, to trade at 83.36.