By TraderVox.com
EUR/USD stood firm although more reports emerged that the meeting in which the final decisions are to be taken was postponed to Wednesday.
The USD index which gives us a measure of USD strength against six other major currencies saw a sharp fall yesterday.
Meanwhile as an additional boost to the Euro reports are emerging of China coming to the aid of Greece. The Chinese premier yesterday indicated this as a real possibility but expressed concerns about how difficult it will be to convince the Chinese people..
The EUR/USD jumped to an unprecedented 1.3256 which represents its highest level since mid December.
The new Greek deal, we hear involves numerous sharp wage and spending slashes, as this are necessary to satisfy the EU and International Monetary fund for a second bailout. Without this help from EU and IMF, it is certain that Greece will default come mid-March.
Greece is also trying to conclude a debt-swap deal with private investors against popular opinion in the country.
Despite the euro growing strong yesterday amid speculation the solid data that came out of the euro zone yesterday was generally bad. This just goes to outline the optimism investors have about the Geek deal and how much help the deal will give to the euro.
The German industrial production report yesterday with a 2.9% fall which is much worse than the expected 0.1% fall we expected at first. Under normal circumstances this was supposed to be bad news for the euro but with the Greek problem overshadowing most investors did not follow up on this.
We expect German trade balance to be released today. Analysts expect a figure of 14.1 billion Euros to be the figure which is slightly less than the expected figure. A falling trade balance is usually bearish for the euro.
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