Mike Paterson’s daily Forex brief
The last 24 hours has seen the usual ups-n-downs that we’ve come to expect in these tight ranges with increasing concerns from the EU leaders that Greece will try to avoid enforcing the austerity measures after the elections in April, but steadied by pledges of continued Eurozone support by the Chinese.
Antonis Samaras, leader of the New Democracy party, currently part of the Greek coalition but expected to win the election, was reported to have refused to sign the bill that was passed on Sunday night, causing a quick drop in the Euro but later suggestions that he would co-operate led to a small rally.
Today’s meeting of the Eurogroup was cancelled and replaced by a conference call to take place later this afternoon around 17.00 GMT (I guess they felt they couldn’t justify the airfares without some sort of positive outcome), and will be reiterating the demand that Greece find an additional â‚¬325 million in spending cuts before being eligible for its bail-out and looking for assurances that the measures will go through regardless of who wins the April elections. Correct, you couldn’t make it up.
So the US $ continues to find favour and EURUSD has been down below 1.3100 but currently sits back at 1.3160 after positive news from the Chinese that they will continue to invest in EU debt and back measures to help the Eurozone out of debt crisis, through IMF and EFSF support. Throwing good money after bad comes to mind but frankly, they don’t have a choice.
GBPUSD found good selling interest down to 1.5675 before recovering a little, and overall the Pound was little changed.
The only real trend as such has been the Japanese Yen continuing to weaken after additional liquidity provided unexpectedly by the BOJ at their meeting on Monday night.USDYEN has been up to 78.67, levels not seen since August last year, and the impact has been seen elsewhere too in the Yen cross pairings, giving a knock-on degree of support to other currencies with EURJPY and CADJPY amongst others moving higher.
Stacks of data out today kicking off with UK Unemployment at 09.30 GMT and BOE Governor King gives his inflation report an hour later before a raft of US numbers out this afternoon.
All in all should be quite a lively day.
And finally, one of the broadsheets reports that British Olympic hopefuls will only be allowed to compete at London 2012 if they agree not to criticise team-mates or sponsors and not to sell their kit on eBay. Each of the 560 athletes hoping to represent GB at this summer's Games will have to sign a 34-page handbook or they will not be allowed to take part. It’s a funny ol’ world eh?
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