Forex4you - Analytics

    Forex4you

    579.00 6.50/10
    60% of positive reviews
    Real

    Euro weakens on Grexit fears

    EUR

    The euro weakened on Monday after fears about Greece’s finances worsened; this came as a result of reports the Greek central bank had asked all regional government authorities to send any spare money they might have to the central bank as it had suddenly encountered unforeseen costs. This led to speculation the country might be running out of money with which to pay both its debts, and public sector worker’s salaries and pensions.

    Greece had to repay the ECB a debt of 79.8bn euros on Monday, and at the end of the month it has to repay the IMF an even bigger 950m debt. This is on top of an estimated 1.7bn in rolling wage and pension commitments.

    The next meeting of Greece and its creditors is in Riga, Latvia on Friday 25th.

    A speech from the Vice-President of the ECB Vitor Constancio in which he discussed capital controls stoked further speculation that Greece might be about to implement such controls if there was a resumption of the mass outflows previously. Constancio said they could only be implemented if the Greek government requested them.

    Constancio also commented on negative euro-zone bond yields, which he said the ECB would be watching closely.

    The ECB published QE programme data which showed 11.612bn of sovereign bonds were bought in the previous week (March 17). This brought the total since the start of the programme in early March to 73.29bn.

    USD

    The dollar rose on Monday after commentary from New York Fed’s William Dudley, who is a voting member of the FOMC, showed no softening in stance due to the recent run of poor data.

    He continued to highlight the fact that Q1 weakness was probably due to transitory factors including bad weather and the strong dollar, but that the economy would probably perk up, resulting in a rate hike before the end of the year.

    Dudley emphasised how the decision when to normalize would be heavily dependent on the economy and therefore data – much as he said at the beginning of the month, when he said he would be watching the labour market closely after the bad Non-Farm Payrolls result, to see whether it was a one-off, or part of a negative trend.

    There was little other data, although the Chicago Fed National Activity Index in March fell by -0.42, from -0.18 when it had been expected to rise to 0.10.

    GBP

    The pound traded mixed – falling to the greenback but rising to the euro and the yen, as the day progressed it grew progressively weaker.

    Rightmove House Prices, released late Sunday evening, showed a 4.7% rise yoy in February and 1.6% mom – contrasting with the 5.6% and 1.0% respectively of previous periods.

    Regarding the May election, a new poll put the conservatives 4.0% in front, which is an increase from the batch of polls before, which mainly showed Labour in the lead. The prospect of a conservative win may also have weighed on sterling as it would mean a probable referendum on membership of the E.U.

    The pound was supported, however, by a more positive outlook for its Euro-zone neighbour which is expected to begin growing more strongly. This is expected to lead to a rebound in U.K exports, since Europe is the U.K’s largest trading neighbour.

    JPY

    The yen weakened versus the dollar in London trading on Monday losing some 46 points from Friday’s close, despite better than expected performance recorded on the Tertiary Index.

    The index measuring tertiary industry activity in Japan was up a seasonally adjusted 0.3% mom in February, the Ministry of Economy, Trade and Industry confirmed on Monday, standing at 100.50. This topped forecasts for a decline of 0.7% following the 0.4% gain in January.

    Among the industries moving higher were real estate, transport and postal activities, finance and learning support. Industries moving lower included retail, utilities, personal services and compound service.

    Over the weekend, at a speech in the USA, BOJ Governor Haruhiko Kuroda stated that the central bank’s massive programme of expansionary monetary policy was working as originally intended to overcome deflation in the nation.

    In late news, Bloomberg report the Bank of Japan may lower their inflation estimates.

    EUR

    The euro weakened on Monday after fears about Greece’s finances worsened; this came as a result of reports the Greek central bank had asked all regional government authorities to send any spare money they might have to the central bank as it had suddenly encountered unforeseen costs. This led to speculation the country might be running out of money with which to pay both its debts, and public sector worker’s salaries and pensions.

    Greece had to repay the ECB a debt of 79.8bn euros on Monday, and at the end of the month it has to repay the IMF an even bigger 950m debt. This is on top of an estimated 1.7bn in rolling wage and pension commitments.

    The next meeting of Greece and its creditors is in Riga, Latvia on Friday 25th.

    A speech from the Vice-President of the ECB Vitor Constancio in which he discussed capital controls stoked further speculation that Greece might be about to implement such controls if there was a resumption of the mass outflows previously. Constancio said they could only be implemented if the Greek government requested them.

    Constancio also commented on negative euro-zone bond yields, which he said the ECB would be watching closely.

    The ECB published QE programme data which showed 11.612bn of sovereign bonds were bought in the previous week (March 17). This brought the total since the start of the programme in early March to 73.29bn.

    USD

    The dollar rose on Monday after commentary from New York Fed’s William Dudley, who is a voting member of the FOMC, showed no softening in stance due to the recent run of poor data.

    He continued to highlight the fact that Q1 weakness was probably due to transitory factors including bad weather and the strong dollar, but that the economy would probably perk up, resulting in a rate hike before the end of the year.

    Dudley emphasised how the decision when to normalize would be heavily dependent on the economy and therefore data – much as he said at the beginning of the month, when he said he would be watching the labour market closely after the bad Non-Farm Payrolls result, to see whether it was a one-off, or part of a negative trend.

    There was little other data, although the Chicago Fed National Activity Index in March fell by -0.42, from -0.18 when it had been expected to rise to 0.10.

    GBP

    The pound traded mixed – falling to the greenback but rising to the euro and the yen, as the day progressed it grew progressively weaker.

    Rightmove House Prices, released late Sunday evening, showed a 4.7% rise yoy in February and 1.6% mom – contrasting with the 5.6% and 1.0% respectively of previous periods.

    Regarding the May election, a new poll put the conservatives 4.0% in front, which is an increase from the batch of polls before, which mainly showed Labour in the lead. The prospect of a conservative win may also have weighed on sterling as it would mean a probable referendum on membership of the E.U.

    The pound was supported, however, by a more positive outlook for its Euro-zone neighbour which is expected to begin growing more strongly. This is expected to lead to a rebound in U.K exports, since Europe is the U.K’s largest trading neighbour.

    JPY

    The yen weakened versus the dollar in London trading on Monday losing some 46 points from Friday’s close, despite better than expected performance recorded on the Tertiary Index.

    The index measuring tertiary industry activity in Japan was up a seasonally adjusted 0.3% mom in February, the Ministry of Economy, Trade and Industry confirmed on Monday, standing at 100.50. This topped forecasts for a decline of 0.7% following the 0.4% gain in January.

    Among the industries moving higher were real estate, transport and postal activities, finance and learning support. Industries moving lower included retail, utilities, personal services and compound service.

    Over the weekend, at a speech in the USA, BOJ Governor Haruhiko Kuroda stated that the central bank’s massive programme of expansionary monetary policy was working as originally intended to overcome deflation in the nation.

    In late news, Bloomberg report the Bank of Japan may lower their inflation estimates.


    To leave a comment you must or Join us


    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree