Dhaka, Bangladesh (BBN) - The USD fell broadly on Friday, reversing some of the prior day's sharp gains, as Wall Street stocks rebounded and traders feared a downgrade to the United States' credit rating was imminent.
The Euro (EUR) got an added boost after Italy's Prime Minister pledged to speed up austerity measures and bring the country's budget into balance by 2013. The news helped temporarily calm markets a day after U.S. stock indexes posted their worst losses in two years.
The Swiss Franc (CHF) hovered near record highs against the USD and EUR in Asia on Tuesday, having surged on the back of a global stock market rout as a crisis of confidence gripped investors, a weekly review report said.
Against the JPY, the USD slipped to 77.57 from above 80 Yen just last week, while the EUR slid to around 110.00 Yen from recent highs around 114.00. The common currency also lost ground on the greenback, falling to USD 1.4129 from a session high around USD 1.4400 on Monday.
The EUR's decline came even as traders said the ECB bought Spanish and Italian debt early in the European session, putting into action its vow to "actively implement" its bond-buying program.
The USD tumbled against the JPY and EUR on Tuesday after the U.S. Federal Reserve said it will keep interest rate low for at least two years. The EUR edged up from lows against major currencies in Asia on Thursday but was seen vulnerable to renewed selling pressure as worries about the euro zone sovereign debt crisis spread to the region's banking sector.
The single currency also reclaimed some ground against the CHF and the USD, rising to 1.0336 francs and advancing to USD 1.4222. EUR/CHF reached an all-time low around 1.0075 francs earlier in the week. The USD rose to a session high of 77.23 Yen, but it quickly ran out of steam. USD/JPY fell on talk that China was selling the U.S. currency against Asian currencies.
The Australian Dollar (AUD) climbed to USD 1.0227 recovering from a dip to USD 1.0110 in the wake of disappointing local jobs data. The JPY fell against the USD on Thursday, after coming within a whisker of its all-time high. The USD jumped to above 77 Yen from 76.30 Yen, prompting concerns that the Bank of Japan was selling Yen to try to weaken the currency.
BBN/SSR/AD-12Aug11-2:49 pm (BST)