Market info

Dollar mixed on pledge to cut deficits

28 Jun  - Fundamental 

The dollar rose against the euro and yen but fell against the pound after world leaders pledged to significantly reduce deficits over the next two years.

What prices are doing: The dollar was up 0.8% versus the euro to $1.2276.

Against the U.K. pound, the greenback lost 0.4% to $1.5111, and it ticked up less than 0.1% against the Japanese yen to ¥89.41.

Last week, the dollar gained as investors realized China's move to let its currency appreciate would be gradual, but the U.S. currency lost steam by the end of the week after the Federal Reserve kept its interest rate policy unchanged.

What's moving the market: At the G-20 economic summit in Toronto this weekend, world leaders created aggressive goals to reduce deficits and aid the economic recovery.

The summit resulted in an agreement to follow through with existing stimulus plans, but at the same time, cut deficits in half by 2013.

As investors worry that drastic deficit cuts could hurt the fragile state of the global economy, the safe haven dollar is increasingly attractive to investors.

Meanwhile, the Department of Commerce said Monday that personal income and spending rose slightly in May.

Spending by individuals edged up 0.2%, last month, slightly beating the 0.1% increase economists surveyed by Briefing.com had expected.

Personal income increased 0.4% in May, coming in below the 0.5% rise economists had forecast.

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