Forex Review – Euro steady on Greek PSI hopes; China growth concerns hurt aussie

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The euro bounced off a two-week low against the dollar to trade higher during the U.S. session as Greece said it expected private creditors to accept its debt-swap terms because it constitutes “the best offer. Once the PSI debt swap deal is concluded by the end of this week, the second bailout funds can slowly be released so that Greece will avoid a default.

EURUSD opened in New York at 1.3186 and rose steadily to a high of 1.3240.

Earlier in the European session, the euro took a hit after euro zone services sector PMI came in lower than expectations, to fall lower than January’s figure.  But profit taking helped the single currency move higher to end three days of losses against the dollar.

The dollar was weaker today versus the British pound and yen, as well as Swiss franc.

GBPUSD rose to 1.5876 from the day low of 1.5785. The dollar was lower against the yen today versus Friday when it had reached a nine-month high  of 81.86 yen. USDJPY was mostly trading sideways in New York hours, in a 81.32 – 81.53 range.

The Swiss franc gained against the weaker dollar, pushing USDCHF down to a low of 0.9105 from 0.9147. Better-than-expected Swiss retails sales data helped boost the franc.

Commodity-linked currencies like the Australian and Canadian dollar were pressured today by China’s announcement of a lower growth target rate for 2012 than previous. AUDUSD fell 0.8 percent on the day to low of 1.0655. China is Australia’s major export market. USDCAD rose steadily through the day and hovered near the peak of 0.9958.