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Euro Weakness Keeps Greenback Afloat

3/5/2019, 11:31:14 AMBasics of Trading
Euro Weakness Keeps Greenback Afloat

The dollar eased from session highs against its rivals Monday but held some support following a slump in the euro to two-week lows.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.20% to 96.43.

EUR/USD fell 0.35% to $1.1334. Euro area economic data showed wholesale inflation for the 12 months through January topped expectations, but confidence in the euro zone improved to -2.2 in March from -3.7 in February.

Weakness in the single currency helped the greenback hold gains, even as it slipped from session highs after U.S. construction spending for December came in weaker than expected.

December’s report capped a year in which "total outlays grew 4.1%" and "(r)esidential spending increased just 3.3% for the year, the slowest pace since 2011 amid sluggish homebuilding activity," Wells Fargo said.

GBP/USD fell 0.22% to $1.1373 as weaker U.K construction offset gains in the pair that were fueled by hopes that U.K. Prime Minister Theresa May could persuade pro-Brexit lawmakers to support her withdrawal deal at a vote slated for March 12. The prime minister has promised lawmakers the option to vote on delaying Brexit beyond the March 29 deadline should her deal fail to scoop up the required votes.

A group of Brexit-supporting lawmakers, who previously rejected May’s deal, are reportedly open to supporting the prime minister's deal if it their suggested changes are included, The Sunday Times reported.

USD/CAD rose 0.17% to C$1.3317 as the loonie was supported by gains in oil prices. The uptick in oil prices comes amid reports the United States and China could wrap up a trade deal as soon as this month, while signs that OEPC members remain loyal to the oil-production-cut accord also boosted sentiment.