Forex - Dollar mixed vs. rivals, global tensions still support


Shutterstock photo - - The dollar was mixed against the other major currencies on Friday, but still remained within close distance of an 11-month high as concerns over tensions in Iraq and Ukraine continued to support safe-haven demand.

Markets were jittery after U.S. President Barack Obama on Thursday authorized air strikes in Iraq to put an end to an onslaught by Islamic militants and begun military air-drops of humanitarian supplies to besieged religious minorities to prevent a "potential act of genocide".

Fresh tensions between Russia and the West over Ukraine also weighed, as Moscow banned imports of most food from the West on Thursday.

EUR/USD rose 0.22% to 1.3392, pulling away from nine-month lows after European Central Bank President Mario Draghi said on Thursday that interest rates will remain at present levels "for an extended period of time" and reiterated that the bank was still committed to using unconventional measures if the outlook deteriorates.

Earlier Friday, official data showed that Germany's trade surplus narrowed to €16.2 billion in June, from €18.8 billion in May. Analysts had expected the trade surplus to narrow to €17.5 billion in June.

A separate report showed that French industrial production rose 1.3% in June, exceeding expectations for a 1.0% gain, after a decline of 1.6% in May, whose figure was revised from a previously estimated 2.3% drop.

The pound edged lower, with GBP/USD slipping 0.15% to 1.6806 after official data showed that the U.K. trade deficit widened to £9.41 billion in June, from £9.15 billion in May, whose figure was revised from a previously estimated £9.20 billion. Analysts had expected the trade deficit to narrow to £8.80 billion in June.

The dollar was lower against the safe-haven yen and Swiss franc, with USD/JPY sliding 0.30% to 101.78 and with USD/CHF down 0.29% to 0.9063.

At the conclusion of its monthly policy meeting, the Bank of Japan maintained its pledge to increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen.

The Australian dollar slipped lower, with AUD/USD falling 0.19% to a fresh two-month low of 0.9256 after the Reserve Bank of Australia cut growth and inflation forecasts and reiterated that interest rates will remain on hold.

Elsewhere, NZD/USD edged down 0.18% to 0.84862 and USD/CAD dipped 0.01% to 1.0922.

The export-related currencies still found some support after data showed that China's trade surplus widened to $47.3 billion last month, from $31.6 billion in June, exceeding market expectations.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.16% to 81.47, still close to Wednesday's 11-month highs of 81.78. offers an extensive set of professional tools for the financial markets.
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This article appears in: Investing , Forex and Currencies

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