The US Dollar Index made slight gains on currency markets today as the world waits to see whether the Greek private sector will agree to large write downs on government bonds in order to avert a messy Greek default.<\/p>\n
Latest Dollar Index Rate<\/strong><\/p>\n The ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 79.775 – 19.57 GMT today, from the session open of 79.926. Technically a slight trading loss for today, however the US dollar made a 0.4 percent gain against the yen and short term direction for the Dollar Index is firmly in the hands of the Greeks.<\/p>\n Greek Default Worries<\/strong><\/p>\n Concerns over Thursday’s expected announcement on the Greek bond swap eased slightly on Wednesday as Greek pension funds and major banks stated that they will take part in Greece’s bond swap offer to private creditors.<\/p>\n The US dollar has been holding firm against the euro as this situation comes to a head. European stock markets managed modest gains, following Tuesday’s sharp sell off. Oil prices gained once again today, mainly on Iran tensions.<\/p>\n But after months of tortuous negotiations and repeated setbacks, senior bankers and officials remained cautious ahead of the Greek bond swap deadline.<\/p>\n “About the private sector deal – I don’t have a crystal ball. I cannot predict this with certainty.” Dutch Finance Minister Jan Kees de Jager told parliament.<\/p>\n Only 177 billion euros of the debt is covered by Greek law and it was not immediately clear how much of the debt covered by Wednesday’s commitment was under Greek law and how much under international law. Latest estimates are that 120 billion euros of Greek bonds have been swapped, or agreed.<\/p>\n US Dollar and Oil Prices<\/strong><\/p>\n On Tuesday, the US Dollar Index rose 0.6 percent on nervousness over the Greek debt restructuring, and US WTI oil futures for April 2012 delivery dropped 1.9 percent, to $104.70 a barrel on the NYMEX.<\/p>\n However US Light crude oil bounced back on Wednesday, as hopes that Greece’s debt restructuring will go through, creating better bargains for oil buyers and fanning interest in riskier trades. US WTI is currently around $106.49 a barrel – 20.34 GMT, or 1.6 percent higher on the day.<\/p>\n Some investors say the significance of the tie between oil and the US dollar was becoming exaggerated, but the unusual gains in both the US dollar and oil prices over the last few days continues as more people piled in to a higher price for both. However some traders do not agree.<\/p>\n “It was only a matter of time until it began to break down. It’s getting back to reality now.” said Mark Vonderheide, managing partner of Geneva Energy Markets, noting the factors that drive oil prices are too complex to be distilled into an exchange rate alone.<\/p>\n<\/p>\n