Dollar rises on debt woes as investors seek safety

By @ibtimes on

The single currency appreciated against a basket of currencies following the data that was released from the European continent which showed persistent challenges in the area that shares the euro.

The euro fell against the dollar for the third day on investor's concern that debt problems will cast its shadow on the area, making it difficult for government to raise funds.

These speculations arise ahead of Portugal's auction to sell €500 million six-month bill today. Portugal holds the biggest deficit in the euro-zone after both Greece and Ireland acquired a bailout loan from the EU and IMF.

The pound weakened against the dollar following the release of PMI Construction index, which contracted for the first time in 10-month. The Chartered Institute of Purchasing and Supply that is responsible of releasing the index showed that the gauge fell to 49.1 in December compared with 51.8 a month earlier. A reading above 50 is considered an expansion.

The dollar index, which tracks the performance of the green currency against six major currencies rose on the daily scale to 79.66, compared with the opening levels of 79.56, where the index set a high of 79.71 and a low of 79.47.

The EUR/USD pair fell on the daily scale with signs of further bearishness throughout today. The pair is nearing 1.3230 levels, compared with the opening levels of 1.3307, where it managed to set a high of 1.3324 and a low of 1.3230.

With the breach of 1.3245, the pair's path is paved to target 1.3080.

As for the pound, the cable traded unchanged and at the opening levels against the dollar at 1.5580. The pair reached the highest at 1.5626 and a low of 1.5534.

As the pair narrow trades, an expectations of a bullish trend remains intact with targets at 1.5680, keeping in mind the importance of stability above 1.5510 as a breach of those levels would cause the suggested trend to fail.

The dollar traded near the opening levels against the yen, as it inched higher to 82.10, compared with the opening levels of 82.00, while setting a high of 82.20 and a low of 81.86.

The pair's trend remains bearish for this week with fluctuation to be noted throughout the week along with a minor correction to the upside. The pair's nearing 82.00, but with the Stochastic Oscillator heading towards an overbought area on the daily scale, the pair might witness a correction later on today that would allow it to re-test levels at 82.00 where obtaining a daily closing below this level, would pave the path for the pair to target 80.35 and 79.0, keeping in mind the importance of stability in trading below 82.30.

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