Dollar rises as euro slips on Greece anxieties

April 20, 2015

New York (Apr 20)  The dollar rose on Monday as the euro slid half a percent against the U.S currency amid gathering concerns that Greece may default on debts.

Coming off its worst weekly performance in a month, the dollar also gained against the Japanese yen and the British pound. Treasury yields were down, and Wall Street equities were ahead after a sell-off on Friday.

The dollar index was last up 0.45 percent after a slump last week had added to signals that the greenback's year-long rally against other major currencies might be sputtering.

"Since the dollar was on the back foot, you may be seeing a repositioning, where some investors have decided that at these new levels it may make sense to be long the U.S. dollar," said Charles St-Arnaud, senior economist and strategist at Nomura Securities.

The euro was last off about 0.7 percent against the dollar at $1.0734, weighed down by the European Central Bank's bond-buying program and the risk Greece could leave the single currency within months.

International Monetary Fund meetings over the weekend did nothing to ease those fears.

"We see the dollar moving towards parity with the euro in the third quarter, but if something happens around Greece, it may come sooner," said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi UFJ in London.

"(Beyond monetary policy) this is the other big risk hanging over the euro at the moment."

The Australian and New Zealand dollars both eased back after solid gains following a move by China over the weekend to boost banks' lending power in Asia's biggest market.

The People's Bank of China (PBOC) on Sunday cut the amount of cash that banks must hold as reserves (RRR) in its latest attempt to help spur bank lending and combat slowing growth.

China is the biggest export market for both Australia and New Zealand and an easing of demand there has been at the heart of a steady slide which for the Aussie now dates back two years.

The Australian dollar touched a near one-month high of $0.7844 after the China move. It last traded at $0.7710, off 0.95 percent on the day.

Source: CNBC

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