Forex - Dollar broadly higher vs. rivals ahead of Merkel-Sarkozy meeting

Investing.com – The U.S. dollar was broadly higher against most of its major counterparts on Tuesday, amid reduced demand for riskier assets ahead of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy later in the day.

During European morning trade, the greenback was up against the euro, with EUR/USD slumping 0.4% to hit 1.4387.

Preliminary data released earlier showed that German economic growth nearly stalled during the second quarter, increasing by a seasonally adjusted 0.1%, below expectations for a 0.5% increase.

The greenback was also higher against the pound, with GBP/USD shedding 0.27% to hit 1.6346.

The U.K. Office for National Statistics said earlier that the rate of consumer price inflation in the U.K. accelerated to 4.4% in July from 4.2% in June. Analysts had expected U.K. consumer price inflation to rise by 4.3%. 

Meanwhile, the greenback was lower against the safe haven yen and Swiss franc, with USD/JPY easing down 0.03% to hit 76.82 and USD/CHF falling 0.24% to hit 0.7826.

Elsewhere, the greenback was higher against the risk-sensitive Australian, New Zealand and Canadian dollars, with AUD/USD dropping 0.8% to hit 1.0421, NZD/USD declining 0.4% to hit 0.8294, while USD/CAD rose 0.6% to hit 0.9857.

The Aussie was weighed after the minutes of the Reserve Bank of Australia’s August 2 meeting showed that policy makers extended a pause on interest rates due to global growth concerns.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.39% to hit 74.23.

Later in the day, German Chancellor Angela Merkel and French President Nicolas Sarkozy were to meet in Paris, as the two leaders attempt to ease fears over the euro zone’s ongoing debt crisis.