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Dollar steady vs. euro after ZEW, yen higher

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Shutterstock photo - The dollar was steady close to three week highs against the euro on Tuesday despite upbeat German economic sentiment data, and remained lower against the broadly stronger yen.

During European afternoon trade, the dollar was trading close to three-week highs against the euro, with EUR/USD dipping 0.03% to 1.3346.

The euro briefly touched session highs after data showed that German economic sentiment rose to a 34-month high in February.

The ZEW Centre for Economic Research said that its index of German economic sentiment jumped to 48.2 in February, the highest since April 2010, from 31.2 in January, against expectations for a reading of 35.0.

But the single currency remained under pressure ahead of upcoming Italian general elections this weekend, amid concerns that a hung parliament could hamper ongoing efforts at economic reforms.

The dollar was down against the yen, with USD/JPY falling 0.48% to 93.50.

The yen strengthened broadly on Tuesday after Japan's finance minister said the government is not considering buying foreign bonds through a fund with the Bank of Japan, one day after Japanese Prime Minister Shinzo Abe said the idea was one option for monetary easing.

The greenback was trading close to seven-month highs against the pound, with GBP/USD inching down 0.02% to 1.5462, as recent weak economic data added to fears over a triple-dip recession and the risk of the U.K. losing its triple-A sovereign rating.

Elsewhere, the greenback was hovering near three-week highs against the Swiss franc, with USD/CHF edging up 0.04% to 0.9237.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.22% to 1.0128, AUD/USD up 0.32% to 1.0338 and NZD/USD slipping 0.14% to 0.8441.

The Australian dollar was higher after the minutes of the Reserve Bank of Australia's February 5 meeting indicated that the bank would wait to assess the impact of recent rate cuts before deciding to cut rates again.

The RBA said that while the inflation outlook left scope to ease policy further, it would need to see clear indications of a slowdown in the economy.

The New Zealand dollar rebounded from session lows after dropping earlier following reports that China's quarantine administration had destroyed milk powder imports from New Zealand.

Fonterra Group, the Auckland based dairy product exporter, said none of its products were destroyed by the Chinese authorities.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.04% to 80.72. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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