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Dollar holds gains vs. euro, yen little changed

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Investing.com -

Investing.com - The dollar remained higher against the euro on Monday after euro zone bond climbed and held steady against the yen as Friday's upbeat U.S. jobs report for May continued to support.

EUR/USD slid 0.36% to 1.3593.

Borrowing costs in the euro zone fell to fresh record lows on Monday, as market sentiment was boosted by the European Central Bank's decision last week to launch a package of measures to avert the threat of persistently low inflation in the euro area.

The yield on Spain's 10-year bonds fell to 2.6% on Monday, falling below their U.S. equivalent which was yielding 2.61%. The yield on Ireland's 10-year bonds fell to a euro-era record low of 2.61% while the yield on German 10-year bonds fell to the lowest against their U.S. counterpart since 2005.

Last Thursday, the ECB unveiled a package of measures to avert the threat of persistently low inflation in the euro area on Thursday, but stopped short of announcing an asset purchase program, a factor which lent support to the euro.

Meanwhile, data on Monday showed that euro zone investor confidence deteriorated unexpectedly in June, despite the ECB's new measures to support growth and inflation.

The Sentix investor confidence index fell to 8.5 this month from 12.8 in May, compared to expectations for an uptick to 13.2.

Trading conditions remained light due to the Whit Monday holiday in some parts of Europe.

The dollar was steady against the yen, with USD/JPY at 102.55, still holding below Friday's highs of 102.60.

The dollar remained supported after Friday's nonfarm payrolls report showed that the U.S. economy added jobs for the fourth successive month in May, with employment returning to its pre-recession peak.

The pair showed little reaction after data on Monday showed that Japan's first quarter growth was revised sharply higher.

Japan's economy grew at an annualized rate of 6.7% in the first three months of the year, up from a preliminary estimate of 5.9% growth. The unexpected upward revision was due to a sharp upward revision in Japanese corporate capital spending.

Elsewhere, the dollar was almost unchanged against the pound, with GBP/USD at 1.6791, and higher against the Swiss franc, with USD/CHF climbing 0.46% to 0.8975.

The Australian and Canadian dollars remained higher, with AUD/USD adding 0.11% to 0.9344 and USD/CAD down 0.26% to 1.0905. NZD/USD slipped 0.11% to 0.8491.

In Canada, official data showed that housing starts rose by 198,300 last month, exceeding expectations for an increase of 185,000, after a 196,700 rise in April, whose figure was upwardly revised from a previously estimated 194,800 gain.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% to 80.65.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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