Dollar extends recent gains

The safe-haven dollar climbed higher versus a basket of currencies on Monday, extending hefty gains made last week, as concerns about the global economy and the debt crisis in the eurozone dampened risk appetite.

The greenback strengthened against the euro, shrugging off attempts by European officials to lessen funding strain’s on the region’s banking system, as markets cautiously wait for the outcome of the EU meeting later this week.

The dollar index, which went up by one per cent last week, stood at 82.361, near Friday’s peak of 82.469. versus the yen, it jumped to a two-month high of 80.63 yen, before it was pulled 0.3 per cent lower to 80.24 as a result of profit-taking.

Traders have invested heavily in the greenback after the Federal Reserve opted to refrain from aggressive quantitative easing during a meeting last week. Instead, it announced that its ‘Operation Twist’ scheme, which buys long-term securities and sells short-term bonds, was set to continue.

The euro dropped by 0.4 per cent to $1.2529 from its late New York figure of 1.2563. Traders said that the single currency was ensconced between purchasing interest from central banks at $1.2520 and big macro-fund sell orders above 1.2600.