Euro Stable Ahead of Conference Call
The euro stabilised and traded in a fairly narrow range in the European session. The confusion regarding last night’s cancellation of the Eurogroup meeting was not fully cleared up, though the teleconference is still due to go ahead at 16.00GMT, according to Juncker. Important decisions on Greek funding have been made via teleconference before, but it seems more likely that any decision to go ahead with a second Greek rescue will be deferred until Monday’s regular monthly meeting of Eurozone finance ministers. The Wall Street Journal reported that a tentative agreement has been struck between US congressional negotiators on extending the payroll tax cuts and unemployment benefits through to the end of 2012 – both measures are due to expire on Feb. 29 unless extended. The euro rallied earlier after China’s central bank governor Zhou said China would continue to invest in Eurozone sovereign bonds and would play a bigger role in solving Europe’s crisis via both the IMF and the EFSF. As usual, the comments were short on specifics, but helped carry AUD and NZD higher too. Zhou also expressed his wish that the euro will become a bigger and more important reserve currency. USDJPY held onto yesterday’s gains but couldn’t make much further headway despite closing above the 200-day moving average for the first time in 10 months. EURUSD traded 1.3080-1.3191 and USDJPY 77.36-78.66 since Tuesday’s European close.
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