Dow Jones Industrial Average Loses More Than 200 Points

Dow Jones Industrial Average Loses More Than 200 Points

Good morning and welcome to today’s foreign exchange market commentary on Wednesday, the 7th of March.

Global markets witnessed heightened volatility yesterday though the reasons remained mostly the same; worry of a Greek default ahead of Tuesday’s deadline and general global economic outlook. The US markets tumbled the highest this year with the Dow Jones Industrial Average index losing more than 200 points. Though it seems unlikely that private sector lenders will ultimately refuse to accept Greece’s offer, it is still a possibility, at-least statistically.

After yesterday’s market slump, Athens and the IMF issued warnings stating those who are opposed to the debt-swap plan do not “contemplate the availability of funds.” Stated differently, the creditors are unlikely to receive anything if they don’t play along. The temperature is expected to rise further before midnight tomorrow.

Growth fears raised its head overnight after Australia disappointed with its Q4 GDP numbers. The country has mostly remained insulated from the global crisis, but latest quarter growth came in at 0.4 percent against the expected 0.8 percent. A slowing Chinese economy may further slowdown the predominantly commodities exporter. AUD has slipped about 3 percent over the past few days.


GBP/EURO – 1.1968
GBP/US$ – 1.5728
GBP/CHF – 1.4434
GBP/CAN$ – 1.5722
GBP/AUS$ – 1.4891
GBP/ZAR – 11.997
GBP/JPY – 127.04
GBP/HKD – 12.2118
GBP/NZD – 1.9232
GBP/SEK –  10.6739

EUR: Developments on Greece dominated the single currency’s movement yesterday due to lack of domestic data yesterday. The euro got hammered over a possible Greek default scenario and markets still remain apprehensive with private sector lender’s participation before tomorrow’s deadline. Apparently a clutch of small Greek pension funds have spoilt the game though most large debt holders have agreed to the write-downs. The EUR/USD pair has dropped to 1.3140 levels and is unlikely to see much movement unless some announcement is made. The GBP/EUR pair has remained largely range-bound and is trading around 1.1978.

USD: Sterling has weakened against the greenback overnight following the Greece-default scare. Cable weakened further after UK housing prices growth number came in lower than expected. The market remains edgy over the ongoing PSI deadlock and risk is off at the moment. The greenback has advanced against all major currencies in the last 24 hours. The GBP/USD pair opened at 1.1978 this morning.

Have a great day!


Leave a reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>