Dollar index remains lower with eyes on Greek proposals

The dollar remained broadly lower against a basket of other major currencies on Wednesday, amid fresh hopes for a solution to Greece’s debt crisis after euro zone officials gave the country until Thursday to present new proposals to secure a deal with creditors.

The yen rallied as Chinese shares continued to plunge overnight, bolstering demand for safe haven assets.

USD/JPY was last down down 1.16% to 121.11, the lowest level since May 22.

Chinese shares fell sharply on Wednesday, extending a broad based selloff despite fresh regulatory measures to restore investor confidence.

The selloff has been fueled by concerns over a slowdown in the world’s second largest economy and exacerbated by worries over risks to financial stability from the turmoil in the market.

The yen was trading close to one-month highs against the euro, with EUR/JPY down 0.79% to 133.86.

EUR/USD rose 0.32% to 1.1047 after European leaders handed Greece an ultimatum – it has five days to strike a new bailout deal with its euro zone creditors or face a banking collapse.

The Greek government was to present a formal application later Wednesday for a new rescue package from the European Stability Mechanism, the euro zone’s permanent bailout fund.

If an agreement cannot be reached in time, European Union leaders will hold an emergency summit in Brussels on Sunday to discuss how to contain the fallout from a Greek exit from the euro zone.

The pound was lower, with GBP/USD down 0.77% to 1.5341.

Industry data earlier showed that U.K. house prices rose 1.7% last month, beating expectations for an uptick of 0.2%. House prices rose by 0.3% in May, whose figure was revised from a previously estimated fall of 0.1%.

Elsewhere, the dollar was higher against the Swiss franc, with USD/CHF rising 0.41% to 0.9505.

The Australian dollar was weaker, with AUD/USD down 0.38% at fresh six-year lows of 0.7423, while NZD/USD rallied 0.97% to 0.6713, off the previous session’s fresh five-year trough of 0.6621.

USD/CAD added 0.26% to 1.2739, re-approaching Tuesday’s three-month highs of 1.2779.

In Canada, data on Wednesday showed that building permits dropped by 14.5% in May, compared to expectations for a 5.0% decline. Building permits increased by 12.1% in April, whose figure was revised from a previously estimated 11.6% gain.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.26% at 96.63, not far from Tuesday’s one-month peak of 97.45.

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