Forex - U.S. dollar lower on Greek, IMF hopes

Forexpros - The U.S. dollar traded lower against its major counterparts Wednesday as optimism over Greek debt talks and the International Monetary Fund attempting to increase its lending capacity boosted risk appetite.    

During late session U.S. trade, the greenback traded lower against the euro, with EUR/USD gaining 0.81% to hit 1.2839.  

The IMF aims to bolster its lending resources after identifying a potential need for USD1trillion in financing in future years. However, the fund will not comment further until its members are consulted, adding strength to the single currency.   

News that Greece is near a deal with its private creditors which would provide the creditors cash and securities with a market value of approximately 32 cents per euro of government debt, increased the euro zone bullishness.  

However, the World Bank slashed its global growth forecast by the most in 36 months, explaining that it forecasts the world economy to grow at 2.5% in 2012, down from a June estimate of 3.6%.  

The  Bank continued to state that the euro zone may contract 0.3% and cut its projection for U.S. growth to 2.2% from 2.9%.  

In addition, the German government trimmed its 2012 forecast to 0.7% from a previous 1%.  

Meanwhile, Germany sold two year notes at a record low yield today and Portugal hit its targeted amount in a sale of 3, 6, and 11 month treasury bills.

The greenback was also lower against the pound, with GBP/USD advancing 0.58% to hit 1.5421.  

In the U.K., data indicated that the unemployment rate soared to a 17 year high of 8.4% in December, from 8.3% in November.  

However, the report also showed that the claimant count climbed to an adjusted 1,200 in December, below the expected increase of 8000, indicating an improving labor market    

Elsewhere, the greenback was slightly lower against the yen and  the Swiss franc with USD/JPY slipping 0.02% to 76.82 and USD/CHF giving back 0.96% to hit 0.9404.    

In addition the greenback was mixed against its Canadian, Australian and New Zealand cousins with USD/CAD dropping  0.27% to hit 1.0125, AUD/USD gaining 0.39% to hit 1.0416 and NZD/USD adding 0.94% to 0.8078.  

An Australian report showed that consumer sentiment climbed just 2.4% in January after an 8.3% decline in December, signaling that the central bank's rate cuts have not significantly bolstered the overall economic outlook.  

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.70% to hit 80.78.  

In the U.S., data showed that producer price inflation declined by an adjusted 0.1% in December, missing expectations for a 0.1% gain.  

Core PPI hit an annualized rate of 3.0% marking the fastest increase since mid 2009.