Progress between Greece and its private creditors strengthens the euro against the dollar to an almost three-week high

The euro strengthened to an almost three-week high against the dollar, as French Finance Minister Francois Baroin said negotiations between Greece and its private creditors are making “tangible progress.” 

The 17-nation currency gained against 13 of its 16 major counterparts, as European Union finance ministers gathered in Brussels to discuss a Greek debt swap and budget rules to protect indebted nations.

Yesterday the head of the International Monetary Fund warned that the global economy faces a depression-era collapse in demand if Europe fails to react quickly enough to dramatically boost the size of its debt-crisis firewall, implement pro-growth policies and to further integrate the Eurozone.

Ms. Lagarde said unless Eurozone leaders urgently built up a bigger emergency bailout fund, two of the Eurozone's largest economies, Italy and Spain, risked insolvency as the cost of financing their debt spikes upwards. Economists said failures in the two economies could spark a global financial and economic meltdown, and members of the IMF are urging Europe to at least double the size of its firewall to around €1 trillion.

The head of the BOE's Monetary Policy Committee, Mervyn King, is to speak today regarding short term interest rates. King has more influence over the sterling's value than any other person.  King commonly talks negatively about the pound, so we may see a weaker pound for today regardless of data due out today.

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