Forex Forecast

Greece Deal Takes Shape After marathon talks which extended well into Tuesday morning, a new bailout deal totally the full targeted EUR130bn was finalised. Most of the deal’s components had been well flagged to the market in advance, but it was the mere fact that negotiations did not fall apart which has helped stabilise sentiment […]

Talks Continue At the time of writing talks were still ongoing between Greece and the Troika. A leaked document highlighted the tensions in negotiations with some of the main structural issues behind the deal revealed.

Euro Marches Higher The euro grinded higher in the European session as Eurozone finance ministers meet at today’s Eurogroup summit. Risk assets were well bid with the euro leading the way higher and the Antipodes benefitting from China’s unexpected weekend decision to cut the reserve ratio requirement by 50 bp.

China Cuts RRR China cut the reserve ratio requirement by 50 bp in a surprise move over the weekend. Previous policy manoeuvres of this kind have generally boosted global risk appetite and we would expect a repeat performance as Asia opens on Monday, especially given the element of surprise.

Risk Stable In Europe Following the flurry of headlines regarding the ECB’s role in the Greek debt swap yesterday, risk appetite was firm overnight, with expectations building for further progress over the weekend. The Financial Times reported that a decision on both the PSI deal and the new Greek bailout is said to be being […]

USDJPY Rally Continues The euro held above 1.31 overnight, after a strong rally in yesterday’s US session. It received a strong boost from unconfirmed reports that the ECB is planning to swap its current holdings of Greek bonds for newly-issued bonds. Reports suggest that the new bonds will have the same features as the old […]

ECB Seeks Protection The euro got a strong boost from unconfirmed reports that the ECB is planning to swap its current holdings of Greek bonds for newly-issued bonds. Reports suggest that the new bonds will have the same features as the old ones, but we think this is very unlikely.

Brinkmanship Continues The euro extended its weakness during the Asia session overnight as investors continued to express concern over the failure of Eurozone authorities to secure an aid package for Greece before bond redemptions are due.

Euro Hit By Bailout Doubts The euro fell sharply after unconfirmed reports that the second rescue deal for Greece might be deferred beyond March 20 – the date when a EUR 14.5 bn Greek bond falls due. Other reports claimed that a small bridging loan was being considered to tide Greece over beyond the mid-March […]

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.

China Rhetoric Boosts Euro 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 they helped the euro recover from yesterday’s selloff, and carried […]