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Forex - Dollar mostly higher as safe haven demand continues

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Forexpros - The U.S. dollar mostly higher against its major counterparts on Tuesday, as concerns over a slowdown in global economic growth and fresh fears over sovereign debt contagion in the euro zone bolstered safe haven demand.

During European afternoon trade, the greenback was higher against the euro, with EUR/USD shedding 0.47% to hit 1.4180.

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 sliding 0.20% to hit 1.6260.

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 record lows against the yen and Swiss franc, with USD/JPY easing up 0.10% to hit 77.28 and USD/CHF dropping 0.55% to hit 0.7792.

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 0.39% to hit 0.9607, AUD/USD tumbling 1.16% to hit 1.0842 and NZD/USD shedding 0.66% to hit 0.8707.

Earlier in the day, the Reserve Bank of Australia kept the benchmark interest rate unchanged at 4.5%, due to "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 up 0.36%.

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.

Also Tuesday, the U.S. was to publish official data on personal consumption expenditures and personal spending.

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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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