Ministers Agree Greek Bailout Terms

27 November, 2012

Simon Eastman

Monday was a fairly quiet day for the pound, which traded within small ranges against most major currencies. Against the euro and the US dollar it was a small 30 point range between the high and the low of the day, giving little opportunities for those looking to buy either on a spike.

Despite the lack of excitement, we are seeing the best rates for buying US dollars in a few weeks so if you have a requirement coming up its worth looking at securing your funds soon.

The markets were waiting for news from Brussels as ministers met for the third time this month to try and put together a deal for a Greek bailout. All parties needed to agree so the next tranche of funds can be released to Greece and a more long term sustainable plan put in place. Overnight, the agreement was finally reached. Reports show €44 billion has been released for the next debt repayment along with a reduction in the debt of €40 billion. The news brought further strength to the Euro overnight, reaching its highest level in 4 weeks against the US dollar although against sterling levels remain similar to yesterday’s close.

Other Eurozone news which had little effect on the currency markets yesterday was from the Spanish finance minister. He revealed they would be looking to secure €37 Billion of EU funds to re-capitalise their banks, with a large majority going to the struggling Bankia.

The highlight of an otherwise grey day was the announcement by Chancellor Osborne regarding the new Bank of England governor. Mervyn King steps down in June next year and his replacement will be current Canadian Central Bank boss Mark Carney. The post came as somewhat of a surprise (probably to no one more than current deputy Paul Tucker) but in the Chancellor’s words; “He is quite simply the best, most experienced and most qualified person in the world to be the next Governor of the Bank of England,”

Today should be a little more interesting with UK GDP, Index of Services and Total Business Investment data releases this morning at 9.30am. Speeches by Fed members Lockhart, Bernanke and Evans in the US along with Housing Price Index, Consumer Confidence and the Redbook Index should give us a bit more movement with currencies today.