The U.S. dollar gained against the majority of its counterparts overnight, erasing some of its losses from earlier in the week. The dollar pulled back from a two-week low against the Euro as European stocks fell 0.5%. The greenback also enjoyed a reprieve versus the Canadian dollar as the price of crude oil fell back below $100 a barrel and as a government report showed that inflation fell more than economists anticipated, weakening the argument for higher interest rates. Later this morning, the economic docket is expected to show purchases of existing home sales in the U.S. climbed 5.2% to 4.65 million annual pace last month, the most since May 2010, according to a Bloomberg New s survey.
The Euro retreated from a two week high against the dollar on decreased demand for higher-yielding assets and as Greek officials and private creditors struggled to reach an agreement on a debt-swap plan. European officials and Greece’s private bondholders agreed in October to carry out a 50% cut in the face value of the nation’s debt by voluntarily exchanging outstanding bonds for new securities, with a goal of reducing the country’s borrowing to 120% of gross domestic product by 2020. The two sides have struggled to reach an accord on the coupon and maturity of the new bonds, raising the danger of default. An accord is essential to a second financing package for Greece, which faces a 14.5 billion-euro bond payment on March 20. Still, the common currency is headed for its first weekly gain in seven weeks after France and Spain held successful bond auctions yesterday.
The British pound held a tight range against the U.S. dollar, but gained against the Euro as a report showed U.K. retail sales rose in December. The Office for National Statistics said sales excluding fuel rose 0.6% from November, when they fell a revised 0.5%. Meanwhile, the Bank of England will maintain a forecast of no growth over the fourth and first quarters, policy maker Ben Broadbent told Market News International in an interview.
