Good morning. Investors are flocking to safe haven of the US dollar this morning after the Greek government made an overnight announcement that Athens would miss a deficit reduction target set just months ago. Finance ministers of the eurozone meet today at 16.00 BST in Luxembourg ahead of another meeting tomorrow. A meeting about the meeting, interesting! Greek finance minister said the economy is expected to shrink 5.5%, making it impossible to meet deficit targets. The government managed to get austerity measures worth €6.6 billion approved, which will ultimately result in 30K state job losses. Expect plates to be smashed on the streets of Athens
The Eurozone crisis remained the main worry for investors last week, which weakened the pound. The GBP/USD pair hovered around 1.55. The Troika of the European Central Bank, the International Monetary Fund and the European Union are scrutinising Greece’s deficit target, and despite Athens announcing it will miss the 7.6% deficit target, analysts expect it to receive the next tranche of bailout money in the coming days.
CURRENCY RATES OVERVIEW
GBP/EURO – 1.1626
GBP/US$ – 1.5512
GBP/CHF – 1.4135
GBP/CAN$ – 1.6288
GBP/AUS$ – 1.6116
GBP/ZAR – 12.5732
GBP/JPY – 119.40
GBP/HKD – 12.0892
GBP/NZD – 2.0388
GBP/SEK – 10.7280
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EURO: The Cable strengthened against the single currency on Friday as the ECB bought heavily for this year’s Single Farm Payment. Chancellor George Osborne speaks at the Conservative party conference later today and out today is the UK manufacturing activity data. Bank of England meets later in the week to discuss interest rates and possible monetary easing measures. The EURO/USD pair opened at 1.3367 this morning. The GBP/EUR pair also opened higher at 1.1645 this morning.
USD: The greenback advanced this morning as risk is off limits for investors after Greece announcement. The USD gained against the Cable on Friday on stronger than expected Chicago PMI data. The EURO/USD pair opened lower at 1.3367 while GBP/EURO pair strengthened to 1.1645. The market will keenly watch Greek developments this week.
Elsewhere, the Polish Zloty fell to 27 month low against the euro o Friday, forcing the government to intervene. Both the AUD and the NZD retreated against the USD on Friday. The GBP also gained against both the AUD and NZD and opened at 1.6106 and 2.0381 today morning, respectively.
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