Greek PSI deadline 8pm GMT this evening
City Index March 8, 2012 1:00 PM
<p>EUR/USD Range: 1.3135-1.3183 Support: 1.3070 Resistance: 1.3225 Yet again we await another Greek deadline as the market remains focused on the result of the Greek […]</p>
Yet again we await another Greek deadline as the market remains focused on the result of the Greek bond swap. A participation rate of 75% has been targeted by the Greeks to help cut the amount of privately held debt with a deadline for investors to declare their intentions set at 8pm GMT this evening. The euro held the 1.3100 level against the US dollar yesterday and rebounded just above 1.3180 as the short term market covered their shorts. There is every expectation that rumours on the PSI could dominate the day with the ECB meeting being the only other distraction where the ECB President Draghi could convey unlimited liquidity support to avoid restrictions in credit supply.
Range: 1.5725 – 1.5771
The pound continues to track broader risk sentiment as events in the UK take a back seat as we await the outcome from the Greek PSI deal this evening to learn of the participation rate. The BoE meeting therefore is very much on the sidelines today with expectations being unanimous for rates to be left on hold at 0.5% and asset purchases to remain at £325 billion. It would be a real surprise if there was any deviation from this expectation.
The AUD market was squeezed overnight despite two days of poor data releases from Australia. Despite the poor GDP number on Wednesday and today’s surprise 15,400 drop in Australian employment versus a consensus of +5000, the AUD still held the 1.0500 level against the USD. The market saw barrier protection bids towards the overnight lows after the jobs data release which initiated a short squeeze with the market now on fence looking for breaks in the 1.0500-1.0650 range.