By TraderVox.com
The possibility of Greece securing a second bailout has pushed the Euro to a two-month high against the Yen and the Dollar. The regions Finance Ministers are expected to meet today for the approval of the second financing agreement for Greece. This has resulted to significant increase in demand for the European assets.
Despite the dispute over the pension cut, Greek politicians agreed on other aspects of the deal which has resulted to the advancement of the euro against the Yen for the second day. ECB is expected to meet today to put in place monitory policy required before Mario Draghi, the Bank’s President announces the policy at a press conference. Analysts are speculating that investors will be looking for haven assets.
According to Neil Jones, a hedge-fund sales head at Mizuho Corporate Bank, the euro has gained tremendously because investors are expecting a deal from today’s meeting. He added that only the final touches on the agreement will be done after which the market will be waiting for the announcement from Draghi to gauge hawkishness or dovishness.
The Euro rose 0.3 percent to 1.3303 at 8.44 a.m. London time but had touched it’s highest against the dollar since December 12 of 1.3313. Against the yen, Euro rose 0.4 percent to settle at 102.66; earlier, it had reached 102.77 yen which is the highest since December 13.
The gain was as a result of speculation that the Greece would pass the agreement on spending cuts which is one of the requirements for a second bailout set by the Troika which comprise of IMF, ECB, and the EU. However, the discussions stalled after the Greek lawmakers failed to agree on the pension cuts.
Later the Greek Finance Minister announced that there were doubts on the agreement which has caused the Euro to pare the previous gains. As of 12:22 PM, the euro was trading at $1.3239. The Prime Minister Lucas Papademos and the three political leaders agreed on all other requirements except for the pension cuts which they said required more elaboration and discussions.
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