The US dollar traded slightly lower vs. most major currencies as dollar gains stabilized despite Standard & Poor's cut of Spain's credit rating outlook. The greenback had made gains yesterday with increased risk aversion due to Fitch Ratings cutting Greece's credit rating. There was positive data in the economic front as mortgage applications rose 8.5% from the previous week. Wholesale inventories also rose 0.3% in October, better than a forecast 0.5% fall.
The euro stayed steady against the dollar even as S&P cut Spain's credit-rating outlook to negative. Greece received a downgrade to BBB+ from Fitch Ratings yesterday as the European Commission said it would help Greece confront its budget deficit.
Sterling fell against the dollar as UK Chancellor to the Exchequer Darling announced a 50% tax on bank bonuses over 25,000 pounds. Also hurting the currency was the trade deficit which unexpectedly jumped in October. The trade gap increased to a GBP 7.1 billion deficit.
The Japanese yen traded higher as poor economic data helped increase safe-haven flows. Gross domestic product in Japan rose 0.3% in the 3rd quarter, annualized growth of 1.3%. The much lower than expectations reading had called for the Japanese economy to grow at 2.8% annualized.
The Canadian dollar rose against the dollar as higher commodities helped the currency.
The Australian and New Zealand dollars rebounded against the dollar from yesterday's lows but demand remains subdued. Data from Australia showing a decline in home-loan approvals, falling exports and consumer confidence also hurt the currency. Consumer confidence fell 3.8% to a reading of 113.8 in December from a 118.3 reading previously. Approvals for home loans fell 1.4% in October from a revised 3.3% increase the previous month. Exports in Australia fell 3% in October as the trade deficit widened to 2.38 billion Aussie.
10-Year Treasury Note Yield: 3.3991%
Dow Jones Industrial Average: 10,298.06 +12.09