German Chancellor Angela Merkel has urged parliament to back a second EU/IMF bailout package for Greece, while conceding it may not work, telling the Bundestag (lower house) that "There is no 100% guarantee that the second bailout programme will succeed”. Germany will have to pay more than any other country for the €130bn ($173bn; £110bn) package that was agreed by Eurozone states last week. Would we expect anything less?
Concerns over the Eurozone’s debt crisis persisted after the Group of 20 nations failed to reach an agreement on enlarging the size of the International Monetary Fund’s lending capacity over the weekend and told European leaders that any outside assistance will be conditional upon a stronger Eurozone debt firewall.
The pound remained lower against the U.S. dollar yesterday, shrugging off better-than-expected U.S. home sales data as concerns over the handling of the debt crisis in the Eurozone continued to weigh.
Portugal will find out today whether it has passed the latest test of its main international backers. Economists say it is likely to approve the next slice of bailout funds for Portugal, worth €14bn.
Looking ahead fundamental wise it is a very busy day in the Markets, with important data from the Eurozone and the US. The forecasts are suggesting that we could see positive results from Europe, which may give the euro some ‘short-term’ strength against the pound. With a strong US figure expected at 15.00 we may see USD continue to strengthen towards then end of the day.
If you are wondering how this may affect your currency requirements please contact a dealer on 020 72208181, or login to RationalFX for a live rate.