By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar rose against most major rivals Friday, clawing back losses against the euro as initial euphoria over fresh aid for Greece faded and investors considered other risks in Europe.
On Thursday, European Union leaders agreed to a new $157 billion bailout plan for Greece. Read full text of euro-zone plan to help Greece.
The leaders emphasized their commitment to remedy the sovereign-debt contagion. Read more on Greece’s bailout plan.
The new plan includes participation from private investors, who would swap their Greek bonds for longer maturities. The Institute of International Finance said 30 global firms agreed to the bond swap, as well as a buyback of a yet-to-be-determined size. See details of Greek bond swap.
Even with Greece’s problems solved for now, the euro still has “plenty of other worries to deal with,” said Mitul Kotecha, head of global foreign-exchange strategy at Crédit Agricole Corporate and Investment Bank.
These include divergence in growth across the euro zone, overly long-euro market positioning, euro overvaluation, and likely growth underperformance compared with the U.S. Crédit Agricole maintained its year-end euro forecast of $1.30.
“I still suspect that the momentum will not last, with euro/dollar looking particularly rich at current levels,” Kotecha said in emailed comments.
The euro EURUSD -0.22% slipped to $1.4386 from $1.4436 in late North American trading on Thursday. See real-time currency quotes and tools.
The dollar index DXY +0.13% , which tracks the U.S. unit’s performance against a basket of six other currencies, rose to 74.111 from 73.897 late Thursday.
Against the Japanese yen, the dollar USDJPY +0.40% bought ¥78.56, up from ¥78.29 late Thursday. The U.S. unit recovered from a four-month low of ¥78.22 hit earlier.
The British pound GBPUSD -0.18% was buying $1.6305, steady from its level late Thursday, and the Australian dollar AUDUSD -0.01% was changing hands at $1.0837, compared to $1.0838.
Lisa Twaronite is MarketWatch's Tokyo bureau chief.
