FX round-up: Dollar, yen in demand as EU leaders meet

Date: Tuesday 31 Jan 2012

The dollar firmed against major currencies on Monday, recouping some of the previous week's losses, as frustration over the lack of progress on Greek debt talks sapped buyer confidence.

The euro declined to $1.3116 from $1.3215 on Friday.

At Monday's summit meeting in Brussels, Greece rejected a proposal by Germany to give the European Union budgetary supervision power over its spending plans. Safe haven demand increased as uncertainty over Greece drags on and Italian and Portuguese bond yields rose.

The dollar index, which tracks the US dollar against a basket of six other currencies, rose to 79.082 from 78.903 the previous session.

Concern about Europe's debt crisis prompted a flight to the safe haven Japanese yen. Against the yen, the dollar changed hands at ¥76.31 from ¥76.70 previously.

The yen rallied close to a five month high aginst the dollar and firmed more than 1% against the euro.

Sterling rose against a broadly weaker euro but traded at $1.5700 versus $1.5732 the previous session as traders kept an eye on Greece's negotiations with private creditors and the EU summit.

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