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Euro slumps amid Greek stand-off, $ up ahead of Fed

The euro fell 0.4% to $1.1236 while the US dollar index, which measures the greenback against a basket of currencies, rose 0.3%

Reuters New York
The euro fell on Tuesday as it appeared more likely that debt-stricken Greece would default or have to leave the single currency, while the US dollar rose ahead of a meeting by the US Federal Reserve.

Stocks were mixed around the world, with shares in Europe rebounding after a two-day decline, while Wall Street was only slightly higher, further gains limited by the uncertainty surrounding Greece.

Prime Minister Alexis Tsipras lashed out at Greece's creditors on Tuesday, accusing them of trying to "humiliate" Greeks, and he defied a drum beat of warnings that Europe is preparing for his country to leave the euro. The address was seen as a sign that Tsipras was unlikely to accept austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks.
 

The euro fell 0.4 per cent to $1.1236 while the US dollar index, which measures the greenback against a basket of currencies, rose 0.3 per cent. The yen was flat against the dollar.

The all-country MSCI International ACWI Price Index rose 0.1 per cent, while the pan-European FTSEurofirst 300 rose 0.6 per cent, rebounding after a decline of 2.4 per cent over the previous two sessions. Shares in Hong Kong fell 1.1 per cent.

The Dow Jones industrial average rose 73.44 points, or 0.41 per cent, to 17,864.61, the S&P 500 gained 5.6 points, or 0.27 per cent, to 2,090.03 and the Nasdaq Composite added 13.00 points, or 0.26 per cent, to 5,042.97.

US investors were also looking for clues regarding the timing of a rate hike after a two-day Federal Reserve meeting.

The central bank is unlikely to raise rates in this meeting but traders will watch for any hints from Fed Chair Janet Yellen at a news conference after the meeting on Wednesday.

The Fed has said it remains data-dependent and will raise rates only when it sees an improvement in the economy.

Second-quarter data pointed to a recovery after a halt in growth earlier in the year.

The benchmark 10-year US Treasury note rose 6/32 in price, pushing the yield down to 2.3344 per cent.

In the commodity market, US crude futures rose 0.7 per cent to $59.91 per barrel.

Gold prices fell 0.6 per cent while silver lost 0.8 per cent. Copper lost 0.9 percent in its second straight daily decline.

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First Published: Jun 17 2015 | 12:07 AM IST

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