SCOTTRADE ACCOUNT IT'S TIME. It's time for an easier way to invest. Open a Scottrade Account
Apply Now

Spanish recession triggers greenback safety flight

ForexApr 30, 2012 02:19PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Investing.com - The U.S. dollar traded higher against its major counterparts Monday, as Spain entering its second economic recession triggered a risk off flight to the safety of the greenback

During U.S. afternoon  trade, the dollar was higher against the euro, with EUR/USD  giving back 0.17% to hit 1.3231.

U.S. economic data indicated manufacturing activity in the Chicago area slowed significantly more-than-expected in April, while a separate report showed that consumer spending slowed last month.

The Chicago purchasing managers’ index fell by 6.0 points to a seasonally adjusted 56.2 in April from a reading of 62.2 in March. That was the lowest reading since November 2009. Analysts had expected the index to decline by 1.2 points to 61.0 in April.

The Bureau of Economic Analysis said consumer spending rose by 0.3% in March, slowing from 0.9% the previous month, while incomes rose a better-than-expected 0.4%.

But the euro remained under pressure after official data confirmed that Spain’s economy entered a recession in the first quarter, adding to fears that the government will struggle to meet deficit reduction targets.

The greenback pulled back from an eight-month low against the pound, with GBP/USD sliding 0.13% to hit 1.6244.

The pound remained supported despite official data last week showing that the U.K. economy entered a recession in the first quarter, as investors continued to view sterling as a safe alternative to the euro and the dollar.

Elsewhere, the greenback was lower against the yen but edged higher against the Swiss franc, with USD/JPY shedding 0.43% to hit 79.92 andUSD/CHF adding 0.15% to hit 0.9076.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.72% to hit 0.9875, AUD/USD shedding 0.53% to hit 1.0416 and NZD/USD losing 0.38% to hit 0.8187.

In Canada earlier, official data showed that gross domestic product contracted by a seasonally adjusted 0.2% in February, defying expectations for growth of 0.2%, led lower by temporary shutdowns in oil and mining production.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13% at 78.88.

In other single currency bearish news Monday, ratings agency Standard & Poor’s announced widespread credit ratings downgrades on Spain’s troubled banking sector, following a two notch downgrade of the country’s sovereign credit rating last week.

Spanish recession triggers greenback safety flight

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.