Good morning and welcome to today\u2019s foreign exchange market commentary on Friday, the 3st of February.<\/p>\n
The so-called private sector initiative (PSI) hogged the limelight for most of the week, though no deal could be signed till yesterday. However, in order to give some certainty to the super-long negotiations that has been going on for almost a week now, a new deadline has been set and all things Greek must be settled by Monday, February 6. The chairman of euro zone finance ministers announced yesterday that the proposed bond-swap deal is \u2018ultra-difficult\u2019 in an apparent attempt to justify the delay. However, three key points remain unresolved till now. First, the haircut percentage that private sector investors along with the ECB must accept is yet to be decided. Second, the next tranche of bailout amount for Greece, rumoured to be about \u20ac130 billion, is yet to be decided. Third, further austerity measures from Athens are expected.<\/p>\n
The markets had reacted positively over Chinese premier Wen Jiabao\u2019s announcement that the country is considering increasing its commitment in the European Financial Stability Facility. Chancellor Merkel is currently visiting dragon-land to drum up support for the EFSF. However, considering hiking contribution and actually contributing higher amounts are two different things. Don\u2019t be surprised if ultimately China withdraws.<\/p>\n
The two positive developments taking place over the week has been the European nations agreeing to greater financial compact and concurrence over the creation of the \u20ac500 billion European Stability Mechanism. The ESM is a permanent bailout fund since the EFSF was meant to be a short-term solution. However, experts including the Organisation for Economic Cooperation and Development (OECD) said a safety net of about \u20ac1 trillion should be sufficient.<\/p>\n
Services PMI numbers are expected from both sides of the pond today, with US payroll data due in the afternoon. Today\u2019s data along with Greek PSI outcome will set the tone for next week\u2019s price movement.<\/p>\n
CURRENCY RATES OVERVIEW\u00a0<\/strong><\/p>\n GBP\/EURO<\/strong> \u2013\u00a01.2048 If you want to get the best\u00a0currency<\/a><\/strong> transfer<\/a> <\/span><\/strong>\u00a0prices it important to compare prices. Find out how much you could save! We compare prices from all the major players including: Travelex, Moneycorp, Smart Currency Exchange, International Foreign Exchange….<\/p>\n EURO: Lack of a deal over Greece continues to weigh the single currency down. Despite the ongoing deadlock over the PSI negotiations, talks of a deal are doing the corners. The EURO\/USD failed to break the 1.3200 level yesterday and opens at 1.3154 this morning. Spain and France got some relief yesterday as borrowing costs tumbled over well-supported demand. No economic data is due from Europe today except payroll numbers. The GBP\/EUR pair opens at 1.2032 this morning.<\/p>\n USD: Despite MPC member Posen\u2019s comments over quantitative easing, the Sterling remained strong against the Greenback yesterday. The less-than-expected unemployment claims number strengthened the cable further. The nonfarm productivity and unit labour costs also came in better than expected causing the Pound to rally. However, Posen\u2019s announcement of an QE in February pared Sterling\u2019s early gains against the dollar. The GBP\/USD pair opens at 1.5830 this morning.<\/p>\n
\nGBP\/US$<\/strong> \u2013 1.5816
\nGBP\/CHF<\/strong> \u2013 1.4499
\nGBP\/CAN$<\/strong> – 1.5812
\nGBP\/AUS$<\/strong> \u2013 1.4788
\nGBP\/ZAR<\/strong> \u2013 12.1131
\nGBP\/JPY<\/strong> \u2013\u00a0120.51
\nGBP\/HKD<\/strong> \u2013\u00a012.27
\nGBP\/NZD<\/strong> \u2013 1.9034
\nGBP\/SEK<\/strong> \u2013\u00a0 10.647<\/p>\n