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Forex - Dollar lower vs. most rivals as risk sentiment improves

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Forexpros - The U.S. dollar was lower against most of its major counterparts on Monday, as better-than-expected Japanese economic data helped ease fears over the global economic outlook, boosting appetite for riskier assets.

During European morning trade, the greenback was down against the euro, with EUR/USD gaining 0.49% to hit 1.4319.

European Union Economic and Monetary Commissioner Olli Rehn said in an interview published Monday that Italy, Spain and France will not need financial bailouts, as these countries were taking "the right steps" to balance their budgets and reform fiscal policies.

The greenback was also lower against the pound, with GBP/USD edging 0.22% higher to hit 1.6316.

Traders shrugged off a report from industry group Rightmove showing that U.K. home prices fell by 2.1% in August, the second consecutive monthly decline and the largest since December.

Meanwhile, the greenback eased up against the yen, with USD/JPY adding 0.26% to hit 76.88.

Preliminary data released earlier in the day showed that Japan's economy contracted less-than-expected in the second quarter, signaling the country is rebounding from March's earthquake disaster at a faster rate than expected.

Japan's gross domestic shrank by 0.3% in the second quarter, or 1.3% on an annualized basis. Analysts had expected Japan's economy to contract by 0.9% in the quarter, or 2.5% on an annualized basis.

The yen was also weighed after Finance Minister Yoshihiko Noda pledged to take "bold action" to curb gains in the yen.

The dollar was also higher against the safe haven Swiss franc, with USD/CHF soaring 2.2% to hit 0.7950, as speculation that the Swiss National Bank would act further to weaken the franc weighed heavily.

Elsewhere, the greenback was lower against its Australian and New Zealand counterparts, but up against the Canadian dollar, with AUD/USD climbing 0.57% to hit 1.0415, NZD/USD gaining 0.33% to hit 0.8349, while USD/CAD rose 0.15% to hit 0.9887.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.22% to hit 74.54.

Later in the day, the U.S. was to produce official data on manufacturing activity in New York State and a report on the balance of domestic and foreign investment in the U.S.

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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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