Periphery Spreads Widen, Euro hits all-time low versus franc
In a quiet trading session due to market holidays in most European centers, periphery debt spreads widened as forex markets focused predominantly on Greece. Despite a new rescue package for Greece looked like a done deal, divergences still exist between key players. The ECB has been reluctant on any private sector involvement while politicians, mainly in Germany, backed by banks are in favor.
Today, doubts emerged over the possible reaction of rating agencies to an eventual private sector involvement and whether the Greek parliament will approve further austerity measures.
The euro fell to a record low versus the Swiss franc, at 1.2004 and is down around 0.40 percent at the time of writing.
Sterling lifted by expectations of higher inflation data
Sterling was higher on Monday against the euro and the dollar, as forex traders await key UK inflation data to be published tomorrow. Concerns surrounding Greece also supported sterling gains versus the euro. The pound was at its highest level in over a week versus the single currency, up almost 0.30 percent.
Cable was also higher versus the greenback, as it found support at the 100-day moving average at 1.6247. It is up almost 0.60 percent at the time of writing.
NZD slips as another earthquake hits Christchurch
Another earthquake, of 5.5 magnitude, hit Christchurch New Zealand on Monday. This was the second quake to hit the area so far this year after. As a result the New Zealand dollar fell across the board.
The kiwi fell more than 1 full cent versus the US dollar, and more than 200 pips against the Aussie, as forex investors eased on rate hike expectations. Kiwi is down almost 1 percent against the greenback, 1.30 percent against the euro, around 1.20 percent versus the Aussie and more than 1.60 percent against the swissie.
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