Good morning and welcome to today\u2019s foreign exchange market commentary on Tuesday, the 23rd of October. <\/p>\n
The first country to exit the eurozone may be Cyprus because it presents the scariest picture in Europe. The country\u2019s president is a Moscow-educated Marxist who also heads the AKEL, the acronym for the Cyprus Communist Party. He became the president of the EU earlier this year which is not a ceremonial position. And he\u2019s not particularly fond of western capital.<\/p>\n
But the irony is the island nation may have to seek western capital to bail itself out. The banks in Cyprus were never in great shape given their exposure to Greece. The recent default by Greek government has wiped out bank capital making them insolvent beyond redemption. Some estimates suggest recapitalizing the Cypriot banks would require funds equal to 100 percent of GDP. The country it will run out of cash next month.<\/p>\n
But the problem is Nicosia is not cooperating publicly or privately. Greece has learned to go through the rigours of cooperation with the Troika, nodding to strict conditions that it has no intention of executing. Cyprus on the other hand has rebuffed the Troika, stonewalling its austerity proposals. Cypriot political parties and the government must agree to austerity measures before the bailout check is ultimately mailed. EU has plans to bundle Greece, Cyprus and Spain into one package and send it to Finnish and German parliaments for approval. But that won\u2019t be easy, especially after reports that the Bundestag is turning against bailouts, something it never championed in the first place.<\/p>\n
GBP\/EURO \u2013 1.2272
\nGBP\/US$ \u2013 1.6014
\nGBP\/CHF \u2013 1.4861
\nGBP\/CAN$ – 1.5902
\nGBP\/AUS$ \u2013 1.5524
\nGBP\/ZAR \u2013 13.8771
\nGBP\/JPY \u2013 127.88
\nGBP\/HKD \u2013 12.4098
\nGBP\/NZD \u2013 1.9602
\nGBP\/SEK \u2013 10.5596 <\/p>\n
EUR<\/strong>: The single currency gained against most of its peers yesterday after Spanish Prime Minister Rajoy\u2019s People\u2019s Party won the regional elections in Galicia. This added some certainty about Spain\u2019s continuity in the single-currency region amid market speculations that the Iberian nation is now one step closer to seeking a formal bailout. Sentiments got further boost after French President Francois Hollande said he and German Chancellor Merkel consider Ireland to be a special case and are seeking a separate deal for its bank debt. However, Moody\u2019s Investors Service downgraded Catalonia and four other regions Spanish regions yesterday and markets remained mostly directionless in the absence of solid developments. The euro gave up its prior gains today morning as poor corporate earnings dragged the pan-European Stoxx 600 index down. The euro can weaken further against the pound and the USD as there\u2019s very little data coming out of Europe today.<\/p>\n USD<\/strong>: The greenback was on the back-foot against the cable yesterday after an independent report showed UK insolvencies declined in September, boosting confidence in the economy\u2019s recovery. The GBP\/EUR pair dropped to 1.2245 as sentiments strengthened further following Spain\u2019s regional election results, lifting the EUR\/USD pair as well. Markets will now look forward to Thursday\u2019s Q3 UK GDP reading that is expected to show return to moderate growth. Markets will eye the UK mortgage approvals number this morning while BoE Governor\u2019s speech in the evening will be closely followed for indications on the central bank\u2019s monetary policies in the future. The euro has weakened this morning as European equities slipped following weak corporate earnings results.<\/p>\n Have a great day!<\/p>\n","protected":false},"excerpt":{"rendered":" Good morning and welcome to today\u2019s foreign exchange market commentary on Tuesday, the 23rd of October. The first country to exit the eurozone may be Cyprus because it presents the scariest picture in Europe. The country\u2019s president is a Moscow-educated Marxist who also heads the AKEL, the acronym for the Cyprus Communist Party. He became the president of the EU […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[110],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2332"}],"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=2332"}],"version-history":[{"count":2,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2332\/revisions"}],"predecessor-version":[{"id":2334,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2332\/revisions\/2334"}],"wp:attachment":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/media?parent=2332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/categories?post=2332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/tags?post=2332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}