Euro Pound Exchange Rate Steady In Spite Of Greece Rumours

Modified: Tuesday, 2 July 2013 21:45 BST - Written by John Cameron

STORY LINK Euro Pound Exchange Rate Steady In Spite Of Greece Rumours

In a relatively quiet day for tier one data releases, one stand-out piece of leaked information surprisingly slipped under the radar of most investors yesterday. Several news agencies have reported over the past 24hrs that four anonymous European Union policymakers have revealed that Greece has been given a 72hr deadline in order to satisfy the EU/IMF/ECB Troika that it is in a position to follow through on the promises which it has made to keep to the stringent austerity measures which it agreed to when it signed up for emergency bailout funding.

According to the sources, the debt-addled Hellenic state will not qualify for its next tranche of bailout funding if it fails to convince its creditors that it is serious about the stringent spending cuts and tax hikes which it previously ascented to. The Pound to euro exchange rate (currency : GBP EUR) remained resiliently in the 1.1600s yesterday in spite of the reports, which were rapidly denied by EU officials. However, if there is any element of truth in the whispers then the next move for GBP EUR will surely be to the upside, with the band of resistance just above the 1.1900 threshold providing an initial target heading northwards.

Elsewhere, the US Federal Reserve has decided to impose the Basel III bank capital buffer on the US’s retail banks. The development means that up to 100 of the US’s leading banks will have to raise a total of $4.5bn of new capital over the next six years or they will face stringent bonus caps and limits on their day-to-day activities. The US Dollar strengthened on the news, sending the GBP USD exchange rate down to as low as 1.5138 on the day. There could be further downside to come for the pair if tomorrow’s Bank of England policy announcement yields an increase to the UK’s Quantitative Easing programme.

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