The EUR extended a slide in European trading hours Friday and the AUD continued a pullback from Wednesday’s six-month high against the dollar, as weary investors booked profits on positive currency bets and fears re-emerged over Greece’s ability to stave off a default.
Greek political leaders agreed Thursday to stringent spending cuts required by its international creditors, but euro-zone finance ministers have demanded these measures are approved by parliament before they would finally sign off on the deal. Their demands set the stage for a further week of uncertainty over the country’s long-awaited bailout and debt-restructuring package. But for now, a Greek bailout to stave off a messy debt default remains elusive, with another euro-zone meeting called for next week, the country gripped by a nationwide strike and the small nationalist Laos party already indicating it will not vote for the deal.
Against this backdrop, the euro slid against the dollar in Asian trade from Thursday’s near-two-month peak above $1.33, and marked a new low for the day below $1.32 in European hours after an early session rebound faltered.
The CHF was a touch lower, broadly shrugging off Swiss inflation data for January that showed consumer prices took the biggest plunge in more than two years in January, falling 0.8% on the year, against a 0.7% expected drop. In a note to clients, BNP Paribas said this continuation of falling prices would stimulate discussion of a potential rise in the Swiss National Bank’s euro floor currently set at CHF1.20. GBP received a brief fillip against the USD and the euro after U.K. factory gate inflation data fell more than expected, while emerging market currencies like the HUF were under pressure in line with the broader trend.
EasyForexNews Research Team