The US dollar rose vs. most major currencies as Fitch Ratings said that implementation of Greece’s deficit reduction plan may not be a foregone conclusion. Fitch Ratings Director Christopher Pryce said that even as Greece’s short-term measures may improve the outlook, longer term concerns are less certain as there is still dissent within the Greek Cabinet. The Investors Business Daily economic optimism index fell 1.4 to 45.4 in March, slightly lower than forecast increase to 47.5. The small business optimism index fell 1.3 to 88.0 in February.
The euro declined against the dollar as Fitch Ratings said that austerity measures by Greece and Portugal may not be enough to avoid a ratings downgrade.
The British pound fell as Fitch Ratings also said that the UK needs to improve its fiscal policy and Moody’s said that the financial-strength ratings of UK banks haven’t improved. The RICS house price balance report from yesterday also continued to weigh on the Sterling. The report showed that the number of real-estate agents and surveyors saying house prices rose exceeded those reporting declines by 17%, much lower than forecasts at 30%. The UK trade deficit also unexpectedly swelled in January to GBP 3.77 billion from GBP 3.27 billion. Forecasts had called for a fall to GBP 3.00 billion.
The Japanese yen rose against the dollar as investors reversed carry trades amid increased risk aversion.
The Canadian dollar strengthened against the dollar as crude oil traded above $80 per barrel for a fifth consecutive session.
The Australian and New Zealand dollars increased against the dollar with speculation that the Reserve Bank of Australia may raise interest rates from the current 4.00%. The Australian business confidence index rose to 19 in February from 15. The employment report later this week is expected to show that Australian employers added 15,000 positions in February.
