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Single currency hammered in markets as Greek debt story worsens

Pound: Sterling had a mixed day Thursday as we saw gains on the euro first thing but a pummelling in the value of ca¬ble. Currency markets were taking their move from the big story of the week—Greece’s ability to finance its huge debt levels. Players dumped the single currency which led to pound strength initially, but then sterling tripped up on its own accord as UK retail sales numbers were posted, coming in much lower than expected. British retail sales fell more than twice as fast as expected in May, more than reversing the previous months gains. This saw the pound give up all gains made on the euro and quicken cables move down even further. Keeping with GBP/EUR, we did see most losses recover in the afternoon session as the euro was aggressively sold off throughout the day. The main benefactor of this sell off was the US currency as the graphs in cable showed a steep decline in the greenbacks favour. Cable lost over a cent and a half yesterday and has now given up a whopping four cents in the last couple of days as the flight to safe haven currencies really took hold. No major data.    
Euro: Not the euro's finest hour yesterday as it reached a three week low against the dollar on the back of continued speculation Greece will struggle to service its huge debt levels. Stock and bond markets lurched Thursday amid fears the Greek sovereign debt crises was about to unleash a “Leaman-like” shock on the global financial sys¬tem. The single currency hit an all time low on the Swiss franc as the cost of insuring Greek debt against  de¬fault also hit a fresh record. We did see a small rebound in the euro late afternoon but this was limited. Contin¬ued uncertainty that has been generated by Greece’s inability to service its own levels of debt will weigh on the single currency. The euro today gained 0.2% to $1.4204, after touching $1.4074, the lowest level since May 26th. The 17-nation currency tumbled 1.8% yesterday, the most in six weeks. Greece’s immediate concern is to obtain €8.7bn from Europe and €3.3bn from the IMF in July, promised as part of last years precedent-setting aid package to starve off the euro area’s first default. Europe finance ministers will meet on June 19th after an emergency session two days ago broke up without an accord on the next loan disbursement. Data 10.00: E/Zone Trade Balance –2.0B from 0.9B
Dollar: A clean sweep for the US currency was seen yesterday as players dumped riskier assets and fled to the safety of the dollar amid market turmoil in the wake of the ever worsening Greek debt story. The greenback has defi-antly recovered its appeal along the Asian session. Investors, after a very quiet start have assumed this weeks positive dollar flows as risk aversion picks up. The dollar took  another cent off the euro and over a cent and a half off sterling in the face of this massive safe-haven play. If Greece defaults, there exists a possibility that it could take the entire global financial system down, in a repeat of 2008. Back then, investors fled to the dollar, as they appear to be doing now, perhaps in anticipation of a second financial crises. Data 14.55: Prelim UoM Consumer Sentiment 74.2 from 74.3
• Gold fell Thursday, weighed down by dollar strength as concerns over the Greek crises hurt commodities and boosted the US currency. We also saw oil take a turn lower.


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GBP/USD                        1.6110

GBP/EUR                        1.1390

EUR/USD                        1.4140

GBP/JPY                         129.57

GBP/AUD                        1.5302

GBP/NZD                         2.0036

GBP/ZAR                         11.0372

GBP/CHF                         1.3684

GBP/CAD                        1.5864

GBP/SGD                        1.9981

GBP/THB                         49.26

GBP/HKD                        12.5588

red-down; blue-up (snap shot)

 These rates are for indication purposes only.


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