The US dollar and Swiss franc fell across the board on Tuesday, with more losses seen likely, as investors ventured away from safe-haven currencies after tensions in Egypt eased. The euro, on the other hand, recovered broadly, lifted by demand from Asian central banks and buying against the Australian dollar after a Chinese interest rate hike fuelled concerns over that country's economic growth and demand for commodities.
The euro rose above key resistance at $1.3680, a high on electronic trading platform EBS last Friday. If euro/dollar manages to extend beyond $1.3680, analysts see the next resistance level at $1.3767, the February 2 low. In midday trading, the US dollar struggled against a major currency basket, falling 0.4 percent to 77.693, and lost ground against the yen to 81.92 yen.
The euro gained 0.6 percent versus the greenback to $1.3675 as investors booked profits on long dollar positions taken in the last four days. Other euro-linked assets were also higher. The CurrencyShares Euro Trust, an exchange-traded fund listed on the Chicago Board Options Exchange, was up 0.9 percent at $136.28 on Tuesday. The ETF holds euro on-demand deposits in euro-denominated bank accounts. The euro fell 18.2 percent versus the Aussie dollar last year and dropped 19.1 percent in 2009. It has risen 2.8 percent so far this year and clearly has room for further gains. On Tuesday the euro was up 0.3 percent to A$1.3439.