Forex Top Story

USDCAD USDEUR USDGBP USDJPY

Dollar Rebounds Versus Euro After Moody's Downgrades Irish Banks  The dollar rallied versus the broadly weaker euro Monday morning, after a downgrade on Irish banks stoked fears about the region's sovereign debt problems. Moody's Investors Service lowered the long-term bank deposit ratings of Irish government-guaranteed banks by two notches following sovereign ratings downgrade last week. Now all banks are classified as junk. The rating action reflects the reduction in the level of systemic support embedded in the deposit ratings following the downgrade of the sovereign rating, Moody's said in a statement. Late yesterday, China's central bank raised the banks reserve requirement ratio by 50 basis points in an attempt slow credit growth amid rising inflation. Looking ahead, corporate earnings news will be in focus on a day bereft of first-tier economic news from either side of the Atlantic. The dollar jumped to $1.4285 versus the euro, its best since April 6. Last week, the dollar touched a 16-month low of $1.4519 amid expectations the European Central Bank will continue to tighten monetary policy despite economic weakness on the periphery of the euro zone. The buck drifted lower to Y82.70 versus the yen, having edged back to the tight trading range witnessed before the March 11 earthquake rocked Japan. Modest gains left the dollar at C$0.9640 versus its Canadian counterpart, near this month's 3-year low of C$0.9526. The dollar was steady near $1.6280 versus the sterling. The economic news flow from the U.S. will be relatively light this week, but traders will be treated to figures on existing home sales,housing starts, leading indicators, and initial jobless claims.