Reports surfacing that a number of key European financial institutions had signed up to a bond swap deal, aimed at writing off 53.5% of the Greece’s 177 bn euro debt helped boost the markets in Asian trading. Large gains were seen in Stocks, commodities and most major currencies, except the US Dollar, as investors continued the recent returned appetite for more risky positions. The swap deal is fundamental for Greece to be able to cut its debt and secure a 130 bn euro bailout package. Without the aid, Greece may default on its debt repayment due on the 20th of this month which would put the most amount of pressure on the euro and the 17 member state eurozone since its formation.
The US Dollar index was down 0.07%, trading at $79.67 as the USD saw declines against most major currencies. In the EUR/USD, there was a 0.17% increase, trading at 1.3172 whilst the GBP/USD saw a 0.27% increase, trading at 1.5784. There was however, an increase in the USD/JPY, up 0.47% to be traded at 81.48 Yen as data released yesterday showed Japan’s current account move to a record deficit for the month of January. The record deficit of 437.3 bn Japanese Yen was due to lower exports and the higher cost of importing fuel during the Chinese Lunar New Year holidays and Iran tensions pushing the price of Crude Oil up. Japan’s GDP fell 0.2% in Q4, in line with forecasts, after a 0.6% decline in December 2011.
The weakened greenback meant there were increases in the commodity markets with Gold reaching a two day high, up 0.58%, trading at $1693.65 whilst Silver posted a 0.61% increase in Asian markets, trading at $33.790.
Investors should look out for the (USD) government data on initial jobless claims being published today in the US and a European Central Bank press conference (EUR) for increased market volatility with both being scheduled for 1.30pm GMT.
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