Forex: Tuesday’s review

The euro fell from the highest this month against the dollar on concern a deal for Greece to buy back its bonds may falter, holding up disbursements of bailout funds to the nation. 

The dollar extended gains against major counterparts after consumer confidence rose to the highest in more than four years. Euro-area finance chiefs and the International Monetary Fund said they would cut Greece’s interest rates and give it more time to pay back rescue loans after the repurchase of government debt.

In the latest bid to keep the 17-nation euro intact, the lawmakers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan installment in December.

The U.S. currency will appreciate against all of its Group of 10 counterparts except the Canadian dollar by 2014, as America’s economy expands 2 percent, more than the 1.26 percent average. And as the U.S. economy shrugs off the fiscal cliff and outperforms the G-10 nations.

Lawmakers are trying to avert the fiscal cliff, a collection of $607 billion in automatic tax increases and spending cuts scheduled to take effect at the beginning of 2013 unless lawmakers take action, to prevent a short-term shock to the economy and reach an agreement on long-term deficit reduction.

Sterling strengthened after a report confirmed Britain’s economy exited a double-dip recession in the third quarter. The pound added 0.3 percent to 80.73 pence per euro. The U.K. currency was little changed at $1.6025 after rising to $1.6056, the highest since Nov. 2.