Gains for the US dollar due to growing uncertainty regarding the level of participation in Greek debt swap deal

The U.S. dollar added to gains against most of its major counterparts yesterday. This was because safe haven demand found support amid the growing uncertainty regarding the level of participation in a Greek debt swap deal and there were concerns for the outlook for the global economy. 

Concerns over the risk of a Greek default mounted ahead of the 8th March deadline for the country’s private creditors to sign on to a €206 billion debt swap deal, a requirement for Athens to tap a recently approved €130 billion bailout fund.

Greek finance minister Evangelos Venizelos strongly urged private sector creditors to take part in the debt swap deal and warned that it was the best offer they would receive.

Brazil has become the sixth-biggest economy in the world, the country's finance minister has said. Official figures show that the Latin American nation's economy grew 2.7% last year, more than the UK's 0.8% growth. The National Institute of Economic and Social Research (NIESR) and other economic forecasters also said that Brazil had now overtaken the UK.

Looking ahead, it is a quiet day in regards to market fundamentals and the figures expected may not move markets significantly. GBP to euro has been extremely range-bound since Monday and there has been no major movement. Until anything concrete is released from the Eurozone this may continue to be the trend for today.  Dollar strength against euro may continue due to the uncertainty with the Greek saga, with worldwide investors taking “safe” positions within the dollar.

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