Investors were more convinced with the safe haven status of the greenback on Tuesday as the International Monetary Fund reduced its forecasts for global economic growth and indicated sluggish recovery in world economy.

The ICE dollar index DXY which tracks the movement of the US dollar against this six main rival currencies climbed to 79.973 on Tuesday as compared to 79.595 on Monday’s North American trading session.

The US dollar gained on Monday against its major rivals as investors shifted their focus towards the safe haven status of the greenback in reaction of reduced China’s economic growth outlook and meeting of finance ministers from European Countries.

The dollar index DXY which measures the US dollar’s performance versus the basket for six major counterparts advanced to 79.595 on Monday as compared to 79.350 on Friday’s North American trading session. The euro fell to 1.2973 against the US dollar on Monday as compared to 1.3031 on Friday’s late trading hours. If we look at the performance of the euro, the single currency climbed 1.3 percent in last week against the US dollar.

Forex pundits were of the opinion that the euro had a strong last week and correction was overdue. Investors have realized profits ahead of next event which probably could be Spain going for additional rescue funds. Traders were also waiting for Greece’s report from its creditors showing progress of the country in meeting its bailout requirements. In Monday’s meeting of Finance managers, bailout fund of 500 billion euro equivalent to $649.8 billion was approved for European Stability Mechanism. However, investors were still mixed whether Spain will go for a bailout. Analysts foresee that Spain to avail rescue funds is a move which is inevitable.  Germany on the other hand supports Spanish government for not taking the assistance program. German Finance Minister Wolfgang Schauble commented, “The Spanish don’t need an assistance program. That is what the government says over and over again, and we should just trust the Spanish government.”

Among other currencies, the British Pound slipped to 1.6031 against the US dollar on Monday as compared to 1.6141 on Friday. Against the Japanese yen the US dollar traded at 78.32 as compared to 78.64 while the Australian dollar stood at 1.0177 versus the greenback on Monday as compared to 1.0176 on Friday’s session.

The US dollar gained on Tuesday as US Federal Reserve’s official Plosser indicated chances of implementation of Quantitative Easing 3 in his recent comments.

The US dollar gained on Wednesday versus its major rival the euro as investors were upbeat by the US economic data.

The US dollar traded in a seesaw manner on Monday while gained in the last hour versus the single currency in reaction to the speeches of US Federal Reserve Chairman Ben Bernanke and European Central Bank’s Chairman Mario Draghi.

The dollar index DXY which tracks the US dollar’s performance versus its six major rival counterparts gained to 81.696 on Monday as compared to 81.625 on Friday’s North American trading session. The index touched its low of 81.489 before the meeting in the morning hours.

The US dollar gained against its major counterparts on Tuesday and reached its highest in last two years in reaction to debt crisis in the euro zone. Traders were concerned on the fact that the Greece is unable to pay its sovereign debt liability and is in dire need of further debt restructuring.

The euro fell to 1.2066 against the US dollar on Tuesday as compared to 1.2133 on Monday’s North American trading session.