Euro in the ascendancy
An action packed day on the markets yesterday saw Greece’s coalition government almost reach an agreement on new austerity measures to secure a fresh Eurozone bailout fund of €130 billion. However, Eurozone ministers refused the supposed €3.4 billion austerity package proposed by the Greek government and set fresh demands with an urgent deadline for next Wednesday. The Euro strengthens significantly on the first part of this news.
Whilst both the Bank of England and the European Central bank kept interest rates on hold at 0.5% and 1% respectively, the BoE did announce further QE (Putting more money into the system). The markets had already priced in this action so there was little effect on GBP.
GBP did lose some ground versus USD but the last two days have been very much a case of two steps forward and one step back for GBP/USD.
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