Euro rebounds broadly after Greece gains 4 months on its bailout extension: Feb 23, 2015

Market Review - 21/02/2015 04:10GMT 
 
Euro rebounds broadly after Greece gains 4 months on its bailout extension

The single currency rallied in hectic New York trading on Friday after a roller-coaster session after euro zone finance ministers and Greece finally reached an agreement to extend a Greek financial rescue package for four months following a full week of tough negotiations. Euro touched the day's low at 1.1279 at New York open after some euro zone officials warned Greece may exit the euro block if the debt-strapped country refused to accept present extension of its bailout programme.

Earlier, traders sold euro in Asia in anticipation of continued standoff between Greece and the euro zone, price fell from 1.1373 to 1.1303 in Europe. Despite a brief bounce to 1.1354, price fell to session low of 1.1279 on German magazine Spiegel report that ECB officials are preparing for Greek exit fm euro zone and ECB staff are preparing internal contingency plans for how rest of euro zone could be kept intact, however, the ECB declined to comment on Spiegel report. The pair quickly rebounded when European Commission President Jean-Claude Juncker said a Greek exit from the euro won't happen. Reuters then reported Austrian Chancellor Werner Faymann said he wanted a quick solution in debt talks between Greece and its euro zone peers, and German FinMin Wolfgang Schaeuble's quick rejection of the latest proposal from Athens was "exaggerated".

Euro jumped briefly shortly after New York midday to intra-day high of 1.1430 on Bloomberg headline Greek official say it appears Europgroup has reached an accord and later moved narrowly for rest of New York afternoon session when more news of the accord appeared. Euro zone and international creditors gave Greece until the end of Monday to present a list of reform measures it plans and set a deadline of the end of April for creditors agreeing to a final list, the Eurogroup said in a joint statement on Friday.

Dollar fell versus the yen in Asia as investors bought the Japanese yen on risk aversion ahead of the emergency meeting of the Euro Zone finance ministers on the Greek deal. The pair met renewed selling shortly after Tokyo open at 119.09 and fell to 118.58 in European morning, despite a minor recovery to 118.79, price tumbled to session lows of 118.30 in New York morning. News ahead of the Eurogroup meeting gave optimism of a deal struck later in the day together with upbeat U.S Markit February flash manufacturing PMI sent price rallying to 118.88, the pair later climbed to session high of 119.19 ahead of Friday's close in New York.

Data to be released this week :

Japan BoJ minutes, China market holiday, Germany Ifo business climate,current conditions, expectations, UK CBI trades and U.S. existing home sales on Monday.

China market holiday, New Zealand RBNZ inflation expectation, Germany GDP, France business climate, UK BBA mortgage approvals, EU inflation, U.S. Caseshiller and consumer confidence, Federal Reserve Chair Janet Yellen’s testimony before the U.S. Senate Banking Committee on Tuesday.

Australia Wage price, China manufacturing PMI, Italy trade balance and U.S. new home sales on Wednesday.

New Zealand exports, imports, trade balance, Australia capex, Germany consumer sentiment, unemployment rate, France consumer confidence, U.K.GDP, Italy retail sales, business confidence, consumer confidence, EU services sentiment, business climate, consumer confidence, economic sentiment, Canada inflation, U.S. inflation, jobless claims, durable goods and monthly home price on Thursday.

Japan inflation, unemployment rate, retail sales, industrial output, housing starts, construction orders, UK consumer confidence, France producer prices, Swiss KOF indicator, Italy CPI, Germany CPI, U.S. Chicago PMI and pending home sales on Friday.