Dollar sinks broadly on Europe hopes, weak U.S. data

NEW YORK (Forex News Now) – The U.S. dollar sank broadly on Tuesday, in the wake of weak U.S. economic data and amid waning fears over Europe’s sovereign debt crisis.

In U.S. afternoon currency trading, the dollar was down against the euro and pound, with EUR/USD trading at 1.27, up 0.83 percent on the day, and GBP/USD trading at 1.516, up 0.87 percent.

The greenback’s losses came after Greece raised EUR 1.625 billion in its first auction since receiving emergency financing in May, assuaging fears over the debt crisis that originated in the Aegean state.

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Meanwhile, the greenback fell versus the yen and Swiss franc, with USD/JPY trading at 88.53, down 0.12 percent, and USD/CHF trading at 1.0559, down 0.46 percent.

Also Tuesday, official data showed that the U.S. trade deficit widened unexpectedly in May to its highest since November 2008.

The Commerce Department report was followed by more bad news, when the IBD/TIPP Economic Optimism Index showed that U.S. consumer gloom in July reached its highest level since the recession was near the bottom.

The U.S. dollar was also down against the Aussie, kiwi and loonie: AUD/USD traded at 0.8804, up 0.54 percent; NZD/USD traded at 0.7184, down 0.96 percent; and USD/CAD traded at 1.0331, down 0.41 percent.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, was down 0.69 percent.

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