Foreign Exchange Report : GBP USD Rate Drops to 5-Month Low as Greek Debt Fears Escalate

27 Jun 2011 at 5 AM - Written by John Cameron

STORY LINK Foreign Exchange Report : GBP USD Rate Drops to 5-Month Low as Greek Debt Fears Escalate

The Pound Euro exchange rate (GBP EUR) is 1.1260. The Pound Dollar exchange rate (GBP USD) is 1.6314. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5399.

As a new week commences in the currency markets, one story continues to dominate - Greece’s ongoing sovereign debt woes.

In an interview published yesterday, Greece's deputy Prime Minister, Theodor Pangalos, added further fuel to the fire, when he cast doubt over whether the Greek Parliament would pass all of the austerity measures necessary for Greece to access the final €12bn tranche of the EU-IMF’s existing €110bn bail-out fund.

Pangalos was upbeat about his PASOK ruling party winning the first round of voting, which takes place this week, stating that these reforms, ‘will be approved without difficulty.’ A vote in favour of this week’s package would see tax and spending targets set and the instigation of a new Greek privatisation agency.

However, Pangalos went on to state that PASOK ‘may have problems‘ in subsequently gaining support for more specific reforms, which would identify the government assets to be privatised and detail the proposed tax increases. Pangalos went on to state that he doesn’t know, ‘whether some of our members of parliament will vote against it. It's possible."

Meanwhile, leading currency speculator George Soros issued a warning to investors currently holding Euros, stating, ‘we are on the verge of an economic collapse which starts, let's say, in Greece but could easily spread.’ The market is likely to pay close attention to Soros’s words, given his track record. This could cause further downside for Europe’s single currency as today’s session progresses.

The comments by Pangalos and Soros have caused a downward move is Asian equities overnight, signalling a drop-off in global risk appetite. This has, in turn, seen safe-haven support for the US Dollar, which has taken the GBP USD rate to 1.5912 within the last five hours, its lowest level since January 2011.


For other live currency exchange rates and a currency converter see the currency news website.

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