The dollar strengthened against its peers today on thin volume with no significant economic data due to be released out of the US and as the market focused its attention on developments in Greece.  The US dollar index gained 0.23% to a reading of 95.44.  The dollar had weakened earlier in the session following remarks from US President Barack Obama who addressed members of the G7 summit in Germany highlighting his concern surrounding a strong dollar.  

The euro weakened against the dollar declining 0.46% trading at 1.1240 as the market stayed watchful following remarks from German Chancellor Merkel yesterday which highlighted the fact that Greece is running out of time to secure an agreement which will release bailout funds necessary to satisfy its debt obligation to the International Monetary Fund.  A fresh set of proposed reforms were submitted today by Greece to the European Commission which generated renewed optimism that a deal can be reached.  Data released out of the euro zone revealed that the area’s economy expanded by 0.4% in the first quarter while the Greek economy regressed back into recessionary territory shrinking by 0.2%.  

The pound weakened against the dollar with the pair dropping 0.35% trading at 1.5296 following the release of data from the Office for National Statistics which revealed that the UK trade deficit decreased from 3.1 billion pounds in March to 1.2 billion in April.  As a referendum on Britain’s EU membership is due to take place before the end of 2017 which could result in Britain’s exit the pound remained vulnerable.  

The yen strengthened against the dollar with the pair declining 0.1% trading around 124.35 coming off its 13 year high of 125.84 set on Friday.  As the market expects a more hawkish tone from the FOMC this week and as treasury yields are on the rise the pair was supported back to 124.35 after setting a session low of 123.86.  

The Australian and New Zealand dollars weakened while the Canadian dollar strengthened against the greenback.  The Aussie dollar declined 0.2% trading at 0.7687 while the kiwi dollar ticked down 0.1% to 0.7137.  The Aussie had overlooked data which revealed that the National Australia Bank’s business confidence index climbed to a reading of 7 in May up from 3 in April.  The loonie gained 0.67% against the greenback with the pair trading at 1.2327.  The greenback had declined to 2 week lows against the loonie.  The loonie had gained ground yesterday following figures which revealed Canadian building permits rose 11.6% in April beating forecasts for a 3.4% increase.  

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