Forex - U.S. dollar higher as Greece misses debt target

Investing.com - The U.S. dollar traded higher against its major counterparts Friday, as Germany made it clear that Greece missed its debt target and must increase its austerity measures to qualify for the second economic bailout package..

During U.S. morning trade, the dollar was higher against the euro, with EUR/USD falling 0.82% to hit 1.3176.
 
Earlier, the single currencies rally was fuelled when Greek officials  reached an agreement on austerity measures needed to obtain a EUR130 billion bailout package.

The troika of the European Commission, the European Central Bank and the International Monetary Fund met in Brussels yesterday to determine if Greece has met its obligations to qualify for its second bailout package.

The dollar gained strength after things did not bode well for Greece at the troika meeting in Brussels..

German Finance Minister, Wolfgang Schaeuble stated that Greece is missing its debt cutting targets.

Schaeuble explained that two people who spoke on conditions of anonymity, who attended the Brussels meeting, stated that Greece’s austerity plan would leave its debt as high as 136% of gross domestic product by 2020.

The German Finance Ministry went on to state, “The Greek offer is not sufficient and they have to go away to come back with a revised plan.”

As expected, Greece is facing mounting opposition to the austerity measures needed to qualify for its second bailout package.

Greek Finance Minister Evangelo Venizelos stated that the parliamentary vote on the measures, set to begin this weekend, amounts to a ballot on euro membership.

Adding to the negativity, Fitch Ratings reiterated its opinion that Greece will default even if it obtains the bailout funds

Earlier, the United States saw a surprising decline in the number of first time unemployment claims last week. This solidifies hopes that the economic recovery is continuing in the world’s largest economy.

The greenback was also higher against the pound, with GBP/USD rising 0.35% to hit 1.5761.

Yesterday, the Bank of England increased its quantitative easing program by GBP50 billion earlier, citing the "significant margin" of slack in the British economy and left interest rates unchanged at 0.5% in a widely expected decision.

Earlier, official data showed that manufacturing production in the U.K. rose significantly more-than-expected in December, increasing for the first time in three months, while industrial production also rose more-than-expected.

A separate report showed that the U.K. goods trade deficit narrowed more-than-expected in January.

The greenback was higher against yen and the Swiss franc, with USD/JPY adding 0.01% to hit 77.67 and USD/CHF surging 0.72% to trade at 0.9184.

In Switzerland a consumer climate index improved slightly more-than-expected in January.

Elsewhere, the greenback was higher against its Canadian but lower against the Australian and New Zealand dollar, with USD/CAD adding 0.89% to hit 1.0033, AUD/USD plunging 1.28% to hit 1.0648 and NZD/USD giving back 0.86% to hit 0.8268.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, advanced 0.66% to hit 79.21.

Meanwhile earlier in the United States, the U.S. Department of Labor reported the number of individuals filing for initial jobless benefits last week fell by 15,000 to a seasonally adjusted 358,000, beating expectations for a decline to 370,000. 

The previous week’s figure was revised up to 373,000 from 367,000.

Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 13 of the past 15 weeks.