Greek debt downgraded again

Yesterday saw the Euro retain its surprisingly cheap price, with a lack of economic data out and markets instead focussing on developments in the ongoing Greek debt saga. The country was downgraded by ratings agency S&P, who said that Greece’s current debt and financial commitments were “unsustainable” given the economy’s contraction of 1% in the last 6 months and the increase in the deficit from predictions of 0.8% to an actual figure of 3.5% last year. The weaker Euro does not appear to have helped the Greek economy either.

The Greek government may face a choice between paying its debts or paying its bills at home, when the next repayment is due on May 12th. The Greek government meets its creditors in Riga next Friday for further talks, but German Finance Minister Wolfgang Schaeuble warned that an agreement between Athens and its creditors was unlikely to happen in the short term.

All this has kept worries about a further Greek financial tragedy to the fore, and has kept the Euro at cheap levels for those of you holding GBP and looking to send Euro payments abroad. This is despite the uncertainty caused by the General Election campaign at home, which markets have so far not reacted too badly to – although as polling date in May approaches this risk will only increase.

US Dollar weaker

The US Dollar has lost some of its recent gains in value, as last night weaker housing figures came out and pushed the GBP-USD rate back up to around its best level in the last month.

Currency News Today

This morning we have Eurozone inflation figures at 10am, which are always likely to have an effect on exchange rates, followed by US and Canadian inflation later on this afternoon. So with important figures out for these currencies the week could end with some volatility in exchange rates, before the weekend and a very quiet Monday in terms of economic news releases next week.