The U.S. dollar strengthened against most major currencies in the early European session on Friday as investors purchased low yielding assets after the EU summit failed to soothe investor concerns about Spanish and Greek debt problems.
French President Francois Hollande reportedly said Friday that the European Union meeting in Brussels did not discuss a potential aid request from Spain.
Hollande warned against imposing more austerity on Spain, if the country were to ask for a bailout. He said that Spain is making all the necessary efforts to get its public finances back in order.
Eventhough the summit welcomed Greek government's determination in their progress for austerity measures adhered to the bailout package, no announcements to unlock additional funding were made.
Meanwhile, European Union leaders have agreed to establish a single supervisor for banks in euro area and to put in place the required legal framework by the end of this year, so that it can be phased in next year.
In a statement after Thursday's meeting in Brussels, the European Council said a specific and time-bound roadmap for the plan will be presented at the European Council's December 2012 meeting. The meeting acknowledged the need to "break the vicious circle between banks and sovereigns."
Disappointing earnings result from Google also kept sentiment subdued. The company's third quarter profit declined sharply from last year, hurt mainly by hefty charges at its Motorola business that continued to be a drag on results, as well as stock-based expenses.
The greenback hit a 3-day high of 0.9268 against the franc, up 0.19 percent from yesterday's close of 0.9250. On the upside, the greenback is likely to break 0.93 level.
The greenback advanced to a 3-day high of 1.3048 against the euro and a 4-day high of 1.6035 against the pound and held steady thereafter. The greenback closed yesterday's deals at 1.6047 against the pound and 1.3067 against the euro.
The U.K. public sector net borrowing, excluding the temporary effects of financial interventions, fell by GBP 0.7 billion from a year ago to GBP 12.8 billion in September, the Office for National Statistics showed.
For the period April to September, the public sector net borrowing, totaled GBP 37.1 billion, which was below last year's GBP 62.4 billion
Against the Australian and Canadian dollars, the greenback approached multi-day highs of 1.0350 and 0.9877 with 1.03 and 0.99 seen as the next upside target levels, respectively. At Thursday's close, the aussie-greenback and the greenback-loonie pairs were worth 1.0367 and 0.9855, respectively.
Looking ahead, Canada CPI and U.S. existing home sales for September are due.
by RTT Staff Writer
For comments and feedback: email@example.com