The US dollar continued to benefit today strengthening against a basket of currencies as safe-haven demand for the dollar persisted and the crisis in Greece took center stage, while growing concern mounted over the deteriation of Spain and Portugal's economic outlook. The market will, however, start to look towards Friday's non-farm payroll data which is expected to come in at 177,000.
Look for the dollar to continue to benefit from the positive outlook in the US economy coupled with continued pressure on the euro ahead of the Euro Zone leader's announcement of the emergency aid plan to Greece on Friday.
The euro tumbled to a one-year low against the dollar amid civil unrest in Greece with three people killed after a fire bomb hit a bank in central Athens. Also weighing on the single currency is concerns that debt problems could worsen in Spain and Portugal. Warnings from both Germany and the International Monetary Fund are calling for containment of the crisis. Investors remain highly skeptical that Greece will be able to deliver the measures it promised in return for a 110 billion euro aid package.
Sterling remained under pressure ahead of a highly contested parliamentary election due to get underway tomorrow. In other news, PMI construction data came in better than expected at 58.2 versus expectations for a reading of 53.2. Look for the pound to hold close to current ranges ahead of tomorrow's election.
The Japanese yen weakened 0.2 percent against its US counterpart moving closer to an eight-month low. Look for USD/JPY to hold below the key psychological level of 95.
The Canadian dollar fell to six week lows as investors focused on Greece's debt crisis and the potential impact that would have across the Euro Zone. Also weighing on the currency was lower oil prices which dropped below $82 a barrel.
The Australian and New Zealand dollars weakened reaching their worst daily fall in three months as investors worldwide became nervous that Greece's debt crisis would spread. Look for the drop in both currencies; however, to remain short lived supported by positive data out of Australia coupled with expected rate hikes from the Reserve Bank of New Zealand starting as early as next month.
10-Year Treasury Note Yield: 3.552%
Dow Jones Industrial Average: 10,902.43 - 23.28