Pound Euro Exchange Rate Tests Lower As Greece Agrees New Debt Deal With Creditors

Published: Tuesday, 30 October 2012 18:00 BST - Written by Minesh Chaudhari

STORY LINK Pound Euro Exchange Rate Tests Lower As Greece Agrees New Debt Deal With Creditors

The Euro has put in another respectable performance against the other majors in the currency markets during today’s session, sending the GBP EUR exchange rate back into the 1.2300s once more. The single currency was assisted by the news that Greece has struck a new deal with its international creditors. The agreed measures, which include fresh spending cuts of €13.5bn, still need to be ratified by the debt-addled Hellenic state’s parliament next week, but it would be a major surprise if Greek parliamentarians reject the deal, which affords the nation further breathing space and the opportunity to once again avoid a disorderly debt default.

The euro had suffered a blow earlier today when the latest whole of euro zone Consumer Confidence survey revealed a slight dip in the mood of market participants in comparison to last month. In truth, the survey did not reveal any new information – it is generally accepted that the region is facing serious problems. However, the fact that Europe’s policymakers now appear to be taking the situation seriously and are introducing concrete measures to tackle the difficulties, has seen the single currency register healthy improvements since mid-Summer.

Elsewhere, global stock markets have recorded healthy gains on the day, with London’s FTSE 100 closing up by 0.95% and Europe’s bourses generally faring even better. The move back into risk-based assets was partially triggered by news that Spain’s so-called ‘bad bank’ will be stepping into the troubled nation’s secured loan market to buy up distressed loans and reposed properties in an effort to shore-up the nation’s troubled housing sector. The uptick in appetite for risk has seen the safe-haven US Dollar lose ground across the board, sending the GBP USD exchange rate up to 1.6086 this afternoon.

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