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Forex - Dollar up vs. most rivals, but lower against yen, franc

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Forexpros - The U.S. dollar was higher against most of its major counterparts on Monday, following standard & Poor's historic downgrade of U.S. sovereign debt, while safe haven demand boosted the yen and the Swiss franc.

During U.S. morning trade, the greenback was up against the euro, with EUR/USD sliding 0.43% to hit 1.4217.

The euro was higher earlier after the ECB said in a statement late Sunday that it "will actively implement" its bond-buying program, indicating that it will likely buy Spanish and Italian government bonds.

However, the news failed to ease fears over the risk that the euro zone's debt crisis could spill over to the region's third and fourth largest economies.

The greenback was also higher against the pound, with GBP/USD slumping 0.42% to hit 1.6325.

Meanwhile, the greenback was down sharply against the safe haven yen and Swiss franc, with USD/JPY tumbling 1.04% to hit 77.66 and USD/CHF sinking 1.09% to hit 0.7590, after falling to a record low of 0.7526 earlier.

Japanese Finance Minister Yoshihiko Noda said earlier that he "will continue to carefully monitor market moves", signaling that the country was ready to continue intervening in currency markets to stem the yen's strength.

But rating agency Moody's warned that Tokyo's efforts to weaken the yen were ineffective and negative for its sovereign ratings.

Also Monday, official data showed that Switzerland's unemployment held steady at a seasonally adjusted 3.0% in July, as widely expected.

Elsewhere, the greenback was up sharply against the risk-sensitive Canadian, Australian and New Zealand dollars, with USD/CAD jumping 0.66% to hit 0.9885, AUD/USD dropping 0.95% to hit 1.0343 and NZD/USD plunging 1.7% to hit 0.8291.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.1% to hit 74.84.

After markets closed Friday, ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA, and kept the rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.

U.S. Treasury Secretary Timothy Geithner sharply criticized S&P's decision, saying the ratings agency "has shown really terrible judgment and they've handled themselves very poorly".

Meanwhile, leaders from the Group of Seven leading economies said Sunday that they were ready to take every action necessary to stabilize financial markets.

"We are committed to taking coordinated action where needed, to ensuring liquidity, and to supporting financial market functioning, financial stability and economic growth," the G-7 said in a statement.

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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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