Forex Market Review – Euro extends losses on Greek bailout delay; Feb 20 meeting eyed

Important: This page is part of archived content and may be outdated.

The euro extended losses against the dollar in the US trading session on damp risk appetite due to concerns about the Greek bailout. EURUSD began its decline after reports that European officials are considering ways to delay the next bailout payment to Greece for two months, until after the general elections in Greece in April. The pair touched as low as 1.3042, down from a 1.3189 high earlier in the prior session. EURJPY tumbled to  102.20.

 

A further fall was cushioned by a report late in the session that by Eurogroup president Jean Claude Juncker, saying that he is confident that the Eurogroup will be able to take all the necessary decisions on Monday February 20, referring to the next scheduled meeting of the Eurogroup. By then it will be known if Greece will receive of a second package of financial aid for Greece that will be worth 130 billion euros. Juncker said the group received “strong assurances” from the leaders of the two coalition parties in Greece’s government that they will support the austerity program.

 

Also the troika (ECB-IMF-EU Commission) completed its analysis on the sustainability of Greece’s public debt and Greece has set out “the required additional consolidation measures of 325 million euros” required by the Eurogroup as one of the measures demanded for the bailout approval.

 

GBPUSD has been trading sideways all session, supported above 1.5669 and below 1.5721. The UK unemployment rate remained at a sixteen year high, with the jobless benefits claimant count rising more than expected today. However, a further weakening of the pound was halted after the Bank of England, in its quarterly inflation report today, said it expects inflation to continue falling sharply in coming months and projected it to fall below its 2% target for much of the two-year forecasting period.

 

The Canadian dollar slipped from the highest level in almost a week versus its U.S. counterpart due to damp risk appetite. USDCAD rose to 0.9997 from 0.9937. USDJPY remained supported at 78.18, little changed during New York trading. Earlier today USDJPY hit a three and a half month high at 78.65.