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Forex - Dollar broadly higher after U.S. consumer spending falls

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Forexpros - The U.S. dollar remained broadly higher against its major counterparts on Tuesday, as safe haven inflows were boosted after U.S. data showed that consumer spending fell for the first time in almost two years in June.

During U.S. morning trade, the greenback was higher against the euro, with EUR/USD slipping 0.09% to hit 1.4236.

Earlier Tuesday, Italian and Spanish bond yields advanced to 14-year highs, amid fresh worries that the sovereign debt crisis in the euro zone could spread to core economies, in spite of the recent bailout deal for Greece.

The greenback was also higher against the pound, with GBP/USD dipping 0.05% to hit 1.6286.

Official data showed earlier that construction activity in the U.K. fell slightly less-than-expected in July.

Meanwhile, the greenback was trading within striking distance of a record low against the yen and touched an all-time low against the Swiss franc, with USD/JPY down 0.10% to hit 77.12 and USD/CHF tumbling 1.42% to hit 0.7724.

Japan's Finance Minister Yoshihiko Noda said earlier he was in discussions with the Bank of Japan and other countries about the yen's strength, which would hurt several sectors of the Japanese economy if it persisted.

In Switzerland, official data showed that retail sales rose significantly more-than-expected in June, while a separate report showed that Swiss manufacturing activity rose unexpectedly in June.

Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.25% to hit 0.9594, AUD/USD tumbling 1.24% to hit 1.0836 and NZD/USD shedding 0.55% to hit 0.8716.

The Reserve Bank of Australia kept the benchmark interest rate unchanged at 4.75% on Tuesday, due "acute uncertainty" over the global economic outlook.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was unchanged over the day at 74.54.

Earlier in the day, the Commerce Department said consumer spending dipped 0.2% in June, the first drop since September 2009, after inching up 0.1% the previous month. Analysts had expected spending, which accounts for about 70% of U.S. economic activity, to rise 0.2% in June.

Later Tuesday, the U.S. Senate was due to hold a final vote on a measure to raise the U.S. debt ceiling by at least USD2.1 trillion and cut federal spending by as much as USD2.4 trillion.

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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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