By William L. Watts and Sarah Turner, MarketWatch
LONDON (MarketWatch) — The U.S. dollar edged slightly higher against the euro Monday, while the Swiss franc pressed to an all-time high versus the common currency as investors expressed disappointment over the lack of more concrete action to address the euro zone’s sovereign-debt woes.
The euro (EURUSD 1.3158, -0.0019, -0.1442%) traded at $1.3146 against the dollar Monday, down from $1.3173 in late North American action on Friday.
The single currency fell as low as 1.2691 francs versus the Swiss currency (EURCHF 1.2679, -0.0086, -0.6737%) , according to FactSet Research, and changed hands in recent action at CHF1.2695, a loss of 0.6% on the day.
European Union leaders agreed late last week to implement a permanent rescue fund in 2013. However, the currency is struggling after the leaders failed to offer any near-term measures, such as an increase in the current rescue facility, to help shore up confidence in the region.
A five-notch downgrade of Ireland’s credit rating last week by Moody’s Investors Service and threats of downgrades for Spain and Greece have also served to dampen sentiment for the single currency, strategists said.
“The lack of any substantive plan to bulk up the [European Financial Stability Facility] or provide an alternative crisis-management system has kept the market euro-negative as the downgrades keep rolling in,” wrote strategists Adrian Schmidt and Kenneth Broux at Lloyds TSB.
“While there may well be something more forthcoming over the next few weeks, for the moment the market is likely to see this as a green light to sell the euro, suggesting risks of a break below $1.30” versus the dollar this week, they said in a research note.
The dollar index (DXY 80.38, +0.01, +0.01%) — which measures the U.S. unit’s performance against a basket of six major currencies — traded at 80.376 Monday, down slightly from 80.402 in late North American trading on Friday.
South Korea is preparing to test artillery on Yeonpyeong Island, according to reports. North Korea had threatened action if the drill proceeded, but issued a statement Monday that criticized Seoul but said it “did not feel any need to retaliate,” The Wall Street Journal reported.
The dollar bought 83.73 yen (USDYEN 83.6300, -0.4200, -0.4997%) , down slightly from ¥83.90 in late trading on Friday.
The British pound (GBPUSD 1.5555, +0.0053, +0.3419%) edged up 0.1% versus the dollar to trade at $1.5534.
