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US dollar dips as EU migration deal boosts euro

New York

THE dollar slipped to a three-day low against the euro on Friday after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angela Merkel, but the currency was set to log its best quarterly performance in six quarters.

European Union leaders on Friday claimed success in reaching a hard-fought agreement to control immigration even though it faced instant criticism as vague, hard to implement and a potential threat to human rights.

"EU accord is helping to boost sentiment in the euro area," said Karl Schamotta, director of global product and market strategy, at Cambridge Global Payments in Toronto.

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The deal to share out refugees on a voluntary basis and create "controlled centres" to process asylum requests has thrown a lifeline to Chancellor Merkel, whose coalition government has been teetering on the brink of collapse.

"The agreement probably means no further worries about her coalition falling apart. It's therefore positive for the euro," Marshall Gittler, chief strategist at ACLS Global, said in a note.

The euro was up 0.83 per cent against the dollar at US$1.1663.

The dollar index, which measures the greenback against a basket of six currencies, was down 0.76 per cent at 94.663. REUTERS