Good morning and welcome to today\u2019s foreign exchange market commentary on Friday day the 27th of January.<\/p>\n
The markets were busy over UK GDP numbers and Fed monetary policy announcements for the last two days and the ongoing Greek PSI negotiations were kind-of put on the backburner. However, the Greek debt issue again took the centrestage after rumours hit the market about a deal being agreed upon hedge funds and Athens. A Greek newspaper reported that private investors have consented to accept a lower 3.75 pc interest in exchange for their current holdings. This would translate into a 70 pc \u2018haircut\u2019 for the holders of Greek debt, effectively wiping \u20ac100 billion ($130 billion) off the country\u2019s outstanding \u20ac350 billion worth debt. However, the European Central Bank, which holds Greek debts worth \u20ac45 billion, has ironically remained silent and has ignored calls for it to accept losses. The Chief of the International Monetary Fund Christine Lagarde had spoken about involving the public sector to fight the Greek debt crisis, only to be rebuked by the Germans. Jean-Claude Juncker, head of the Eurogroup of eurozone finance ministers, urged Greece\u2019s creditor countries to write-off portion of the debt.<\/p>\n
Meanwhile Prime Minister David Cameron launched a broadside against the EU in Davos, stating the euro doesn\u2019t have the qualities of a single currency. An ongoing EU crisis can drag the UK back into recession and the PM is under pressure at home to stop Europe from imposing too many rules on Britain. Excessive bureaucracy and a raft of taxes are throttling growth in the region, he noted. The proposed financial transaction tax \u2013 that resulted in much controversy after a series of exchanges with the French and Germans, will destroy half a million jobs, warned Mr. Cameron.<\/p>\n
One important development that has largely gone unnoticed is another crisis looming over Portugal. The country\u2019s 15-year debt yield is slowly moving towards the 15 pc mark at a time when the ECB has injected liquidity of about half a trillion Euros through LTRO. This certainly merit attention.<\/p>\n
CURRENCY RATES OVERVIEW<\/strong><\/p>\n GBP\/EURO<\/strong> \u2013\u00a01.1982
\nGBP\/US$<\/strong> \u2013 1.5668
\nGBP\/CHF<\/strong> \u2013 1.4454
\nGBP\/CAN$<\/strong> – 1.5741
\nGBP\/AUS$<\/strong> \u2013 1.4778
\nGBP\/ZAR<\/strong> \u2013 12.2922
\nGBP\/JPY<\/strong> \u2013\u00a0120.88
\nGBP\/HKD<\/strong> \u2013\u00a012.169
\nGBP\/NZD<\/strong> \u2013 1.9104
\nGBP\/SEK<\/strong> \u2013\u00a0 10.659<\/p>\n