Euro Dollar Rates Today: EUR 'grind lower' ends, high expectations that something positive is due out of Greece in near future

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Category: US Dollar Exchange Rate

Published on Friday, 17 February 2012 11:30

Written by Will Peters

The euro dollar exchange rate is the euro pound exchange rate is 0.07% higher on the day at 1.3139. The euro pound exchange rate is 0.2% lower at 0.8293.

Yesterday's US trading session saw the euro find its feet, this after 'the euro grind lower' continued in the morning session.

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"The euro dollar exchange rate was seen breaking through 1.30 as investors continue to express concern over the failure of Eurozone authorities to secure an aid package for Greece before bond redemptions are due," says Chris Walker in an exchange rate note from UBS.

In comments made after the Eurogroup conference call, Jean Claude Juncker merely said ‘decisions’ would be made at next week’s full meeting but it appears doubts remain over Greece’s ability to deliver.

The stop-gap solution seems to be coming up with enough funds to repay creditors only while withholding other forms of aid.

A bridging loan to last the next month is being planned, though essentially this is only buying time for a fuller discussion on the merits of a longer- term plan. The headlines were a wake-up call to a market that had grown complacent about the risks around the current negotiations.

 Nevertheless Juncker said that strong assurances had been received from Greece’s political leaders and implied that full agreement is only a few short steps away.

He specifically mentioned the need for mechanisms to ensure stronger surveillance and to prioritise the repayment of debt owed to creditor nations. Nevertheless, he said that these outstanding issues would be addressed and declared himself ‘confident’ that the finance ministers will ‘take all the necessary decisions’ when they next meet in person on Monday.

Greek Finance Minister Venizelos added that the bond swap details would be announced on Monday provided final agreement is reached on the terms of a second rescue plan.

Elsewhere, the Riksbank cut the repo rate by 25bp to 1.5%; and also lowered its repo rate path accordingly. The bank said economic outlook has weakened due to developments abroad; rate to stay till 2013.

The dovish Ekholm and Svensson dissented, advocated a 50bp cut to 1.25% and a lower repo-rate path than in the monetary policy report.