Dollar extends slide against euro

NEW YORK (CNNMoney.com) -- The dollar continued to decline against the euro, as the shared currency rallied amid fading concerns about Europe's debt crisis and its impact on the global economy.

What prices are doing: The greenback fell 1% against the euro to $1.2341, rising above the $1.23 level for the first time in more than a week.

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The buck fell 0.5% against the British pound to $1.4816, and decreased 0.1% against the Japanese yen to ¥91.45.

What's moving the market: The dollar extended its decline as the euro continued to gain momentum from last week that helped the shared currency rebound from four-year lows near $1.19.

Worries of Europe's sovereign debt troubles and its impact on a worldwide recovery have been easing recently even as rating agencies continue to downgrade euro zone debt.

Moody's cut Greece's debt to junk status late Monday, six weeks after S&P slashed the debt-ridden country's rating.

What analysts are saying: "The downgrade from Moody's was expected," said John Kicklighter, currency strategist at DailyFX.com. "A lot of the discouraging elements about Europe are already priced in, which is why we're seeing a ongoing rally in the euro."

Kicklighter said that although the dollar has been overdue for a pullback, it remains as a prominent safe-haven investment and will maintain strength as European nations struggle to meet their financial obligations in the long term.

"Growth is better positioned in the United States than it is in our counterparts," he said. "Even though the U.S. debt load is also heavy, we're more stable on a global level."

Kicklighter expects the euro will continue to advance against the dollar, but once the currencies reach trading level between $1.27 and $1.31, the gains will slow and fundamentals will steer the direction for the currencies.