The dollar index rose to its highest level in more than year on Wednesday, as the buck hammered the euro after demonstrations against a Greek rescue plan turned violent.
Workers clashed with police in Athens, enraged by budget cuts required as part of a plan to backstop the nation's massive sovereign debt.
With the plan dependent on the acceptance of austerity measures in Greece, it is feared that bond vigilantes will now move on to other vulnerable European nations, including Spain and Portugal.
With risk aversion fueling a rush into safe haven investments, the dollar skyrocketed to a 14-month high near 1.2800 versus the euro. While the buck leveled off in mid-day dealing, it has risen more than 20 cents thus far in 2010.
Fears about sovereign debt also drove the dollar higher against the sterling. Tomorrow's general election in the UK is shaping up to be a three-horse race, and a hung government could raise fears that London can effectively deal with its own mounting debt pressures.
The buck rose to a new monthly high of 1.5066 against the sterling.
Commodity prices tumbled, helping the dollar rise toward C$1.0300 against its resource-linked Canadian counterpart.
On the flip side, the buck came under some pressure versus the yen, easing to 94.15 from an 8-month peak near 95.
Developments in Europe overshadowed a number of key economic releases, including a pivotal prelude to Friday's monthly jobs report.
private sector employment saw a modest increase in the month of April, according to industry data released Wednesday, with upward revisions also resulting in job growth in each of the two previous months.
A report released by payroll processor Automatic Data Processing, Inc. (ADP) said non-farm private employment increased by 32,000 jobs in April following an upwardly revised increase of 19,000 jobs in the previous month.
While a report released by the Institute for Supply Management on Wednesday showed that activity in the service sector expanded for the fourth consecutive month in April, the index of activity in the sector unexpectedly came in unchanged. The ISM said its non-manufacturing index came in at 55.4 in April, unchanged from March.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.