Forex Review – Dollar gains, euro weak on debt woes

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The euro fell to a 2-1/2-week low ahead of the Greek bond swap deadline as investors are increasingly nervous over the outcome of this private-sector debt swap. If there are insufficient participants this could lead to the likelihood of a Greek default. Adding to this are concerns about global growth prospects after weak euro zone GDP data and China reducing their 2012 growth target.

EURUSD fell to 1.3102 during the U.S. trading session, extending losses from the previous two sessions to decline almost 1 percent today.

A  stronger U.S. dollar helped lift the ICE dollar index to a two week high. The index,  which measures the greenback against a basket of six major units, rose to 79.843 versus 78.309 in North American trade late Monday.

The yen gained against most major currencies as investors sought safety during a risk- off market. Against the Japanese yen, the single currency made greater losses to drop 2 percent to a two week low of 105.63 yen. USDJPY fell to 80.57 from 81.57.

The Canadian dollar eased for a third straight session to more than a one-week low against the greenback following direction in commodity prices and other riskier assets on concern that the global growth outlook once again is gloomy.  USDCAD rose to 1.0027. The commodity-linked Australian dollar tumbled to its lowest level since January 25. AUDUSD touched a low of 1.0524.