The US dollar continued to push higher across the board after the release of strong US data. US Factory Orders came in at 1.3 percent for the month of March against a revised 1.3 percent reading in February, while pending home sales increased 5.3 percent in March.
Look for the dollar to continue to benefit from the positive outlook in the US economy coupled with risk aversion over Greek debt concerns as Euro Zone leaders announce their definitive support for emergency loans to Greece on Friday.
The euro fell to a one-year low amid fear that the debt crisis may spread further to additional Euro Zone countries. Even with Greece set to receive 110 billion euros in emergency loans from the European Union (EU) and IMF, investors remained cautious ahead of growing problems and down grades in both Spain and Portugal. Look for the euro to move closer to $1.30 as growing concern mounts over the EU and IMF rescue package.
Sterling weakened to five week lows ahead of Britain's parliamentary election which will get underway on Thursday.
The Japanese yen strengthened against both the US dollar and the euro amid a decline in risk appetite supported by growing debt concerns in the Euro Zone.
The Canadian dollar weakened against the greenback as risk aversion took center stage as investors focused on the EU concerns. Also weighing on the loonie were lower oil prices which tumbled below $85 a barrel. With a solid growth outlook for Canada, though, look for the loonie to move back closer to parity.
The Australian and New Zealand dollars fell despite the fact that the Reserve Bank of Australia (RBA) lifted rates by 25 basis points to 4.5 percent. Driving the lower move, however, was a signal by RBA that its fiscal tightening stance would remain on hold for the near future. Also weighing on the currencies were changes in China's monetary tightening policy announced over the weekend.
10-Year Treasury Note Yield: 3.625%
Dow Jones Industrial Average: 10,916.26 - 233.15