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Forex - Dollar Down as Euro Finds Footing Despite Italy, Turkey Concerns

Published 08/20/2018, 12:47 PM
Updated 08/20/2018, 12:57 PM
© Reuters. The Dollar is heading for a subdued start to the week.

Investing.com - The dollar was unchanged against its rivals Monday after the euro pared losses as the bloc marked the end of Greece's bailout program, but concerns about Italy's public finances kept gains in check.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.14% to 95.86. The dollar had traded as high as 96.31 before retreating.

The euro pared losses Monday, sending the dollar lower, as investors mulled over the health of the eurozone economy as optimism over the end of Greece’s eight-year bailout on Monday was weighed against concerns about Italy's rising debt.

Italy's new populist government has promised to deliver a big spending plan, but market participants are sceptical as to how the country will be able to finance those plans. These concerns were characterized by a sharp rise in Italian bonds yields intraday, increasing the country's cost of raising money by issuing sovereign bonds.

EUR/USD rose 0.19% to $1.1460.

Sentiment on the euro remains challenged, however, as concerns of a plummeting Turkish lira persisted after Turkey's debt was downgraded deeper into junk territory on Friday.

Turmoil in Turkey could gather pace this week as the U.S. is set to roll out further sanctions against the country on Wednesday over its unwillingness to release an American pastor.

The yen, meanwhile, also pressured the greenback after pairing losses.

USD/JPY fell 0.17% to Y110.32 after rising to an intraday high of Y110.69.

GBP/USD rose 0.25% to $1.2783 as the pair seeks to clawback some heavy losses suffered last week which followed Brexit-related concerns. The pound posted its sixth-straight weekly loss on Friday.

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USD/CAD rose 0.01% to 1.3063 as rising oil prices lent support to the loonie, limiting gains in the pair.

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