Good morning and welcome to today\u2019s foreign exchange market commentary on Tuesday the 19th of January.<\/p>\n
The European Financial Stability Facility \u2013 the EU region\u2019s bailout fund looks woefully inadequate now. After a meeting of its 24-member executive committee, IMF chief Christine Lagarde announced that the lender will seek to raise $600 billion in new resources to help countries fight the eurozone debt crisis. To some analysts, this seems a plea to the emerging BRIC economies for higher contribution. The IMF has $387 billion at its disposal with a pledge for an additional $200 billion. It\u2019s unlikely that the US congress will make more loans available to the IMF in an election year when unemployment rate is still high.<\/p>\n
Canada and the US, in fact said yesterday that it expects Europe to contribute more money to resolve the debt crisis, raising doubts over the outcome of the scheduled G-20 meet in Mexico this week. Japan and South Korea also wants bigger contribution from Europe while China may dictate pre-conditions such as more voting power for emerging nations and stabilization of capital inflows and exchange rates through a change of IMF policy before committing more money. In short, Ms Lagarde\u2019s plans may run into trouble sooner than anticipated. <\/p>\n
Meanwhile, Greece will meet its private creditors today for the second time on a crucial bond swap deal bargain. A official Greek communiqu\u00e9 hoped that a solution will be reached today between Prime Minister Lucas Papademos and Charles Dallara \u2013 the representative of private bond holders and head of International Institute of Finance. If no deal is reached in the next few days, Greece\u2019s next tranche of aid will be stuck and the country will near certainly default on the \u20ac14.5 billion of bond redemptions fall due in March.<\/p>\n
Back at home, UK\u2019s unemployment rate remains stubbornly high as the latest ILO reading shows it has climbed to a 16-year high of 8.4 pc compared to 8.1 pc through August. <\/p>\n
GBP\/EURO \u2013 1.2001
\nGBP\/US$ \u2013 1.5416
\nGBP\/CHF \u2013 1.4502
\nGBP\/CAN$ – 1.5598
\nGBP\/AUS$ \u2013 1.4864
\nGBP\/ZAR \u2013 12.3176
\nGBP\/JPY \u2013 118.41
\nGBP\/HKD \u2013 11.9755
\nGBP\/NZD \u2013 1.9270
\nGBP\/SEK \u2013 10.5671<\/p>\n