Good morning and welcome to today\u2019s foreign exchange market commentary on Monday, the 26th of March.<\/p>\n
That nagging fear over a possible euro break up refuses to die down. Nobody seems to be sure about how much information is available in the public domain and the magnitude of the problem. The problem at hand is as much economic as it is political. Just to put matters in perspective, the European Central Bank\u2019s recent \u20ac1 trillion liquidity measures under LTRO (Long Term Refinancing Operation) may prove inadequate. Even if you add the combined lending capacities of the two lifeboat funds in the region, the IFSF and the ISM, still there would a shortfall. Italy alone has an outstanding debt of more than \u20ac2 trillion. Since there are few murmurs about Rome\u2019s maturing debts, on can only hope technocratic Prime Minister Mario Monti has the situation under control.<\/p>\n
Meanwhile German Chancellor ruled out Greece\u2019s exit from the eurozone saying the effect would be catastrophic for the single currency. Noting that existing treaties don\u2019t allow for such exits, she said it would damage the eurozone\u2019s credibility as a single currency union. Indeed if Greece chooses to leave the euro, it will witness steep devaluation of its currency that will trigger a runaway inflation and higher unemployment as corporate profits will slump. Rather a slow and less painful fiscal adjustment is required over the next decade to bring down the country\u2019s perilously high debt levels.<\/p>\n
Back home, the British government will spend about \u00a3680 billion next year; or a little less than \u00a32billion every day. The recent tax changes are expected to mop up an additional \u00a34.5 billion \u2013 the equivalent of a couple of day\u2019s spending. A little more radical measures such as reducing Corporation Tax to 20 percent and increasing personal allowance to \u00a310,000 would have possibly stimulated much stronger growth. This budget may be remembered more for symbolism and rhetoric that anything else.<\/p>\n
CURRENCY RATES OVERVIEW<\/strong><\/p>\n GBP\/EURO<\/strong> \u2013\u00a01.1968 EUR: The single currency advanced against the greenback on Friday as risk sentiments improved. Stronger than expected French business confidence and better Italian retail sales combined with Chinese bank reserve-rate cut rumours triggered the euro\u2019s rise. The market are expected to shift focus to the EZ this week, with the German IFO data expected to set the tone for euro this week. Spanish and Italian bond auctions will also be closely watched later in the week. The single currency opened higher against the Pound today and the GBP\/EUR pair sits at 1.1951 now.<\/p>\n USD: Sterling closed higher against the greenback on Friday at 1.5860. The cable had sunk to 1.5821 earlier after new mortgage approvals in UK came in lower-than expected. However, the pair made a smart comeback though there was barely any data to support the rally except the rumors of an impending Chinese reserve requirement rate cut.\u00a0 There\u2019s not much economic data coming out from the UK this week except the Q4 GDP estimates on Wednesday. However, a slew of economic data are expected on the other side of the pond this week. The GBP\/USD pair opens at 1.5844 this morning.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Good morning and welcome to today\u2019s foreign exchange market commentary on Monday, the 26th of March. That nagging fear over a possible euro break up refuses to die down. Nobody seems to be sure about how much information is available in the public domain and the magnitude of the problem. The problem at hand is as much economic as it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[110],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/1681"}],"collection":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/comments?post=1681"}],"version-history":[{"count":1,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/1681\/revisions"}],"predecessor-version":[{"id":1682,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/1681\/revisions\/1682"}],"wp:attachment":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/media?parent=1681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/categories?post=1681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/tags?post=1681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nGBP\/US$<\/strong> \u2013 1.5861
\nGBP\/CHF<\/strong> \u2013 1.4422
\nGBP\/CAN$<\/strong> – 1.5834
\nGBP\/AUS$<\/strong> \u2013 1.5183
\nGBP\/ZAR<\/strong> \u2013 12.207
\nGBP\/JPY<\/strong> \u2013\u00a0131.12
\nGBP\/HKD<\/strong> \u2013\u00a012.3236
\nGBP\/NZD<\/strong> \u2013 1.9436
\nGBP\/SEK<\/strong> \u2013\u00a0 10.689<\/p>\n