Euro remains firm against dollar on optimism that somehow, there would be a deal in some sort to help Greece avoid disorderly default in March even though the progress has been extremely slow and unsatisfactory. Greek Prime Minister Papademos is expected to meet with three party leaders today finally to agree on the austerity measures. That’s a key in clearing the EUR 130b second bailout from EU IMF. The progress on PSI has be “constructive” has described by Papademos. Meanwhile, there were reports that ECB would accept some sort of haircut which could help Greece lower it’s debt by EUR 11b. After all, nothing is solid yet. But somehow, when investors patience limit was far breached, they seem to be looking beyond Greece.

Regarding Private Sector Involvement, EFSF Deputy CEO Frankel said the fund would “probably play a significant role” and they’re “now waiting for the” private-sector involvement and “new program for Greece to be finalized.” The PSI debt swap deal is expected to slice EUR 100b off the EUR 200b privately held debt and up to 70% loss in net present value. Average coupon rate of the swapped bonds, which was a deadlock, is believed to be finally agreed at 3.6%. Regarding Official Sector Involvement, it’s reported that ECB is holding EUR 50b of Greek bonds which it paid EUR 39b for. With certain mechanism, ECB could return the bonds to Greece, through EFSF, and get back EUR 39b. Effectively Greece would have lowered it’s debt by EUR 11b.

The optimism in Greece situation is somewhat reflected in the strong recovery in EUR/CHF. Of course, Interim SNB president Jordan stepped up rhetoric this week and reiterated the bank’s utmost determination in defending the 1.2 floor. That’s certain another factor that’s supporting EUR/CHF. Technically, the cross, which is in buy zone, is likely building up upside momentum. Meanwhile, attention will be paid on 1.2132 minor resistance. Break of which will likely trigger some buy orders to push the cross back above 1.22 level at least.

Daily Pivots: (S1) 1.5820; (P) 1.5863; (R1) 1.5938; More.

Intraday bias in GBP/USD remains on the upside and current rise from 1.5234 should be targeting to 1.6165 key cluster resistance (61.8% retracement of 1.6746 to 1.5234 at 1.6168). Break will confirm that whole decline from 1.6746 has finished at 1.5234 already. On the downside, break of 1.5729 support is needed to indicate short term topping. Otherwise, near term outlook will remain cautiously bullish even in case of retreat.

In the bigger picture, price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161. At this point, we’re favoring the case that such consolidation is either finished with three waves to 1.6746, or five waves as a triangle at 1.6165. Deeper decline is in favor to 1.4229 key support and decisive break there should extend the long term down trend through 1.3503 low. Meanwhile, strong rebound ahead of 1.4229, or a break of 1.6165, will dampen the immediate bearish view and extend the consolidation from 1.3503 instead.

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:50
JPY
Current Account (JPY) Dec
0.75T
0.63T
0.48T

0:01
GBP
BRC Shop Price Index Y/Y Jan
1.40%

1.70%

5:00
JPY
Eco Watchers Survey: Current Jan
44.1
47.4
47

6:45
CHF
Unemployment Rate Jan
3.10%
3.10%
3.10%

7:00
EUR
German Trade Balance (EUR) Dec
13.9B
14.1B
15.1B
14.9B
13:15
CAD
Housing Starts Jan

191.5K
200.2K

15:30
USD
Crude Oil Inventories

2.9M
4.2M

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The Euro continues to hold close to a 2-month peak with investors hopeful that the Greek government will finally agree to the conditional measures necessary to obtain the second bailout loan which would prevent a disorderly default. As reported at 12:10 p.m. (JST) in Tokyo the Euro was trading against the greenback at $1.3252, a decline of 0.1% but still close to the 2-month peak of $1.3270 which was struck on the EBS trading platform yesterday. Analysts say that the Euro’s bounce was largely a result of a short-positioning squeeze as opposed to an optimistic view of the Eurozone.

Greece’s newest deadline is today, though a rally in the common currency is likely to be limited in scope. One analyst points out that the markets have already buoyed the currency on the rumor, the fact will only give it a bit more of a bounce. The first line of resistance is near $1.3334, the 100-day moving average.

The U.S. Dollar traded up against the Japanese Yen, moving 0.3% higher to 76.97 Japanese Yen, and well off the 3-month low struck last week. The Japanese government confirmed earlier this week that they had been engaging in covert intervention exercises to bring the currency’s value down.

Article source: http://www.dailyforex.com/forex-news/2012/02/Greek-Deal-Optimism-Buoys-Euro/10814

Although Greece’s PSI and its access to the new tranche of bailout fund dragged on, market sentiment appeared to have improved since the last ECB meeting. Moreover, reaction to the 3-year LTRO was positive while economic data over the past few weeks showed improvement. These should allow the ECB to keep the main refinancing rate unchanged at 1% and leave the unconventional monetary measures unchanged.

The EU summit held in early February made little progress. The leaders, except the UK and Czech Republic, agreed to sign a Germany-inspired fiscal pact. However, it’s understood that it would take a long time for the sovereign debt crisis to be cured. Economic data released since the January showed improvements, though. The Eurozone PMI rose to 50.4 in January, returning to expansionary territory for the first time in August. Economic sentiment also strengthened as indicated in ZEW expectations indices. Headline inflation eased to +2.7% y/y in December from +3.0% a month ago.

In January, the ECB stated that economic outlook in the region is with ‘substantial downside risks’ due to ‘a further intensification in the tensions in euro area debt markets and their potential spillover to the euro area real economy’. President Draghi noted during the press conference that while ‘some survey data’ were ‘positive’, the ‘hard data do not yet show this’. We will likely receive similar comments at the February meeting.

In the UK, the BOE is expected to expand its asset purchases by 50B pound in February. The country’s economy has remained subdued and the stubbornly high inflation has started to moderate. Moreover, the previous asset purchase program is about to expire. The February meeting is probably the best timing to extend the amount further.

GDP contracted -0.2% q/q in 4Q11, after a +0.6% growth a quarter ago. On annual basis, the economy expanded +0.7%, up from +0.5% in 3Q11. Industrial activities weakened and it’s increasingly likely that the economy will fall to a mild recession last in the year. Inflation eased to +4.2% y/y in December from +4.8% in the previous month. Core CPI, which excludes energy, food, alcohol and tobacco, also moderated to +3.0% from +3.2% in November. Easing inflation should give the central bank more comfort to extend and expand asset purchases.

Article source: http://feeds.actionforex.com/~r/ActionInsightallReports/~3/bKhTBVWLuj8/

European majors remain generally firm in Asia today after rallying broadly on Greek speculations. There were rumors that political leaders were set to agree on the austerity measures yesterday, but such meeting with Prime Minister Papademos was delayed to today with one leader blaming the delay to ‘missing paper’. Papademos has met troika last night on finalizing the terms for the EUR 130b second bailout. Meanwhile, there are reports that ECB is willing to accept some sort of haircut which could help Greece lower it’s debt by EUR 11b. It’s reported that ECB is holding EUR 50b of Greek bonds which it paid EUR 39b for. With certain mechanism, ECB could return the bonds to Greece, through EFSF, and get back EUR 39b. Effectively Greece would have lowered it’s debt by EUR 11b. Anyway, so far, nothing is confirmed from nobody even though markets are positioning for further rally in European majors.

Yesterday, at the testimony before the Senate Budget Committee, Fed chairman Ben Bernanke stated that the US economy still has ‘a long way to go before the labour market can be said to be operating normally’ and ‘particularly troubling is the unusually high level of long-term unemployment’. Despite the drop in unemployment rate in January, it remained high and probably will take a few years to reach the 7% level. This was probably the main reason for Bernanke not to change his monetary stance.

On the data front, Japan current account surplus came in wider than expected at JPY 0.75T. Eco watchers current reading dropped to 44.1 in January. UK BRC shop price index rose 1.4% yoy in January. Swiss unemployment, German trade balance and Canada housing starts will be released later today.

AUD/JPY is so far the stronger pair this month, up nearly 3%. The cross is even accelerating this week after RBA unexpectedly paused. Also, the cross is helped by broad based selloff in yen. Near term outlook remains bullish and a break of 83.94 resistance will pave the way to test 90.02 key resistance level. Note that firstly, in any case, as long as 72.03 support holds, medium term rise from 2008 low of 55.06 is still expected to resume sooner or later. But, secondly, decisive break of 90.02 is needed to confirm up trend resumption. Or, rise or fall is just a leg inside the sideway pattern.

Daily Pivots: (S1) 100.04; (P) 100.32; (R1) 100.79; More

EUR/JPY’s strong rise and break of 102.20 resistance confirmed that whole rebound from 97.03 has resumed. Intraday bias is back on the upside and current rise should extend to 100% projection of 97.03 to 102.20 from 99.24 at 104.41. On the downside, below 01.60 minor support will turn bias neutral and bring retreat. But near term outlook will remain cautiously bullish as long as 99.24 support holds.

In the bigger picture, fall from 123.31 is part of the down trend from 2008 high of 169.96 and should target 100% projection of 139.21 to 105.42 from 123.31 at 89.52. At this point, we’d anticipate strong support there to bring at least a rebound attempt, as it’s close to 88.96 all time low as well as100% projection of 123.31 to 100.74 from 111.57 at 89.00. Though, a break of 111.57 resistance is needed to be the first signal of medium term reversal. Otherwise, we’ll continue to stay bearish in the cross even in case of rebound.

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:50
JPY
Current Account (JPY) Dec
0.75T
0.63T
0.48T
0:01
GBP
BRC Shop Price Index Y/Y Jan
1.40%

1.70%
5:00
JPY
Eco Watchers Survey: Current Jan

47.4
47
6:45
CHF
Unemployment Rate Jan

3.10%
3.10%
7:00
EUR
German Trade Balance (EUR) Dec

14.1B
15.1B
13:15
CAD
Housing Starts Jan

191.5K
200.2K
15:30
USD
Crude Oil Inventories

2.9M
4.2M

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The Japanese yen weakens mildly in otherwise dull market today. It’s reported that government data released today showed Japan as carried out secret intervention in November. A total of JPY 1.02T was sold against US dollar in the first week of November. The last public intervention was on October 31, in scale of JPY 8.07T. Japan has recently stepped up rhetoric on intervention as USD/JPY approaches 75.56 historical low. But the volume of the voices was somewhat turned down after USD/JPY rebounded since last week. Intervention is always a threat in the Japanese. But after all, we’d maintain that barring unusual circumstances, further intervention would be unilateral and the impact of such interventions would be short lived. Any recovery in yen crosses are still viewed as selling opportunities for larger down trends.

Talking about intervention, SNB interim President Jordan reiterated today that it swill enforce the EUR/CHF 1.2 floor with “utmost determination:. Jordan warned that the bank “won’t tolerate any trading below the minimum rate in the relevant interbank market, and this commitment applies at any time, from the moment the market opens in Sydney on Monday to when it closes in New York on Friday.” Jordan noted that the move “corrected the over valuation of the franc to some extent, investment planning for export-oriented companies has been facilitated, and the risk of both deflation and severe structural damage to the Swiss economy has been reduced.:

Euro remains steady in range so far, except versus Aussie. Investors are still generally optimistic that Greece would “finally” seal the deals to secure the EUR 130b bailout from EU/IMF and avoid disorderly default when it faces massive bond redemption deadline on March 20. However, the progress remains unsatisfactory. Greece must complete the full package by February 15 to allow complex legal procedures to be completed before March 20. And to have the full package means Greece must itself approve on banking and labor reforms, agree on PSI debt swap deal with private creditors and agree on OSI, official sector involvement. EU leaders have stepped up the pressure on Greece as they, same as the markets, are losing patience. We believe that no news would be taken seriously by the markets until something is confirmed and signed in black and white. Before that, Euro will remain soft.

Aussie jumped sharply today and hit new record high against Euro after RBA unexpected left rates unchanged at 4.25%. The RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers’ confidence in China’s demand and US’ economic recovery. The Australian dollar soared after the announcement. More in RBA Unexpectedly Paused After 2 Successive Rate Cuts.

On the data front, New Zealand labor cost index rose 0.7% qoq in Q4, above expectation of 0.5% qoq. UK BRC sales monitor dropped -0.3% yoy in January. Japan leading indicator improved to 94.3 in December. German industrial production dropped -2.9% mom in December. Canada building permits rose 11.2% mom in December. Fed chairman Bernanke will return to Capitol Hill and testify before Senate Budget Committee on US economic outlook today.

Daily Pivots: (S1) 76.42; (P) 76.61; (R1) 76.73; More….

USD/JPY edges higher to 76.86 as recovery from 76.02 temporary low continues today. Further rebound could be seen to 55 days EMA (now at 77.09) and above. But after all, near term outlook remains bearish as long as 78.28 resistance holds. Whole decline from 79.52 is still in progress. Below 76.02 will resume such fall for a test on 75.56 low.

In the bigger picture, there is no sign of long term trend reversal in USD/JPY yet even though downside momentum is diminishing with bullish convergence condition in weekly MACD. USD/JPY is still trading below the falling 55 weeks EMA. Not to mention that it’s far below the falling 55 months EMA. The long term down trend is expected to resume sooner or later with an eventual break of 75.56 low to 70 psychological level. In any case, we’d at least prefer to see sustained break of 55 weeks EMA (now at 79.40) before considering the case of reversal.

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
21:45
NZD
Labor Cost Private Sector Q/Q Q4
0.70%
0.50%
0.50%

00:01
GBP
BRC Sales Like-For-Like Y/Y Jan
-0.30%
-0.80%
2.20%

03:30
AUD
RBA Rate Decision
4.25%
4.00%
4.25%

05:00
JPY
Leading Index Dec P
94.3
93.8
93.2
93.7
11:00
EUR
German Industrial Production M/M Dec
-2.90%
0.00%
-0.60%

13:30
CAD
Building Permits M/M Dec
11.20%
0.80%
-3.60%

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The Euro continues to be pressured by events in Greece as politicians there postpone what is a critical decision on the second bailout offering that will affect the country’s economic future. Without agreeing to the terms of the €130 billion package, the country faces a disorderly default which analysts say could destabilize the Eurozone. As reported at 12:45 p.m. (JST) in Tokyo, the Euro-Dollar was trading at $1.3101, down slightly from New York trading and well off the 6-week peak of $1.3233 which was struck last week. Currency analysts say that $1.3230 is again proving to be a point of resistance.

Elsewhere, the Reserve Bank of Australia surprised the experts by doing nothing and leaving their benchmark rate fixed at the current 4.25%. As a result the Australian Dollar rose against the U.S. Dollar to a 6-month peak of $1.0812. The press statement released by the RBA suggested that the central bank would consider easing monetary policy further if domestic demand continued to weaken.

The U.S. Dollar was also higher against the Japanese Yen, trading up 0.1% to 76.62 Japanese Yen; the Japanese Finance Minister confirms that they remain ready to surreptitiously intervene again if the currency strengthens further. Data confirms that in early November the Japanese government spent approximately 1 trillion Japanese Yen to stealthily enter the currency market

Article source: http://www.dailyforex.com/forex-news/2012/02/Euro-Softens-Aussie-Firms/10801

Aussie jumps sharply today and hit new record high against Euro after RBA unexpected left rates unchanged at 4.25%. The RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers’ confidence in China’s demand and US’ economic recovery. The Australian dollar soared after the announcement. More in RBA Unexpectedly Paused After 2 Successive Rate Cuts. AUD/USD breaches recent high and is pressing 1.08 level while EUR/AUD dived to new record low at 1.2139 and is still in progress for 1.2 psychological level.

On the other hand Euro remains soft in general on Greece uncertainties. Time is running out Greece as it’s facing a massive EUR 14.5 bond payment deadline on March 20. And Greece must secure the EUR 130b second bailout from EU/IMF. To achieve that, Greece must complete the full package by February 15 to allow complex legal procedures to be completed before March 20. And to have the full package means Greece must itself approve on banking and labor reforms, agree on PSI debt swap deal with private creditors and agree on OSI, official sector involvement. EU leaders have stepped up the pressure on Greece as they, same as the markets, are losing patience. We believe that no news would be taken seriously by the markets until something is confirmed and signed in black and white. Before that, Euro will remain soft.

The economic calendar is relatively light today. New Zealand labor cost index rose 0.7% qoq in Q4, above expectation of 0.5% qoq. UK BRC sales monitor dropped -0.3% yoy in January. Japan leading indicator improved to 94.3 in December. German industrial production and Canadian building permits will be released today. Fed chairman Bernanke will return to Capitol Hill and testify before Senate Budget Committee on US economic outlook today.

Daily Pivots: (S1) 1.2198; (P) 1.2221; (R1) 1.2263; More.

EUR/AUD drops further to new record low at 1.2132 so far today. Intraday bias remains on the downside and current fall is expected to target 1.2 psychological level next. On the upside, above 1.2319 minor resistance will turn bias neutral. But break of 1.2476 resistance is needed to signal short term bottoming. Otherwise, we’ll stay bearish even in case of recovery.

In the bigger picture, long term down trend from 2.1127 (2008 high) is still in progress for 1.2 psychological level. A brief bounce might be seen after touching 1.2 but after all, break of 1.2927 support turned resistance is needed to be the first signal of medium term bottoming. Otherwise, we’d anticipate further fall until EUR/AUD reach 1.10/15 key support level. Also, note that break of 1.4341 resistance is needed to confirm trend reversal. Or, outlook will remain bearish even in case of strong rebound.

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
21:45
NZD
Labor Cost Private Sector Q/Q Q4
0.70%
0.50%
0.50%

0:01
GBP
BRC Sales Like-For-Like Y/Y Jan
-0.30%
-0.80%
2.20%

3:30
AUD
RBA Rate Decision
4.25%
4.00%
4.25%

5:00
JPY
Leading Index Dec P

93.8
93.2

11:00
EUR
German Industrial Production M/M Dec

0.00%
-0.60%

13:30
CAD
Building Permits M/M Dec

0.80%
-3.60%

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The RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers’ confidence in China’s demand and US’ economic recovery. The Australian dollar soared after the announcement.

The situation in the 17-nation region Eurozone remained worrisome. As noted in the policy statement, the RBA acknowledged that ‘economic conditions in Europe were weakening late last year, with risks still skewed to the downside’. While corrective actions have been made to contain the crisis, ‘much remains to be done to put European sovereigns and banks on a sound footing’. Economic conditions in the US, however, have shown improvements. Recent economic data pointed to ‘a continuing moderate expansion after a soft patch in mid 2011′. In China, while growth has slowed, ‘most indicators remained quite robust through the second half of last year’.

Domestically, Australian economic growth is still expected to be ‘close to trend’. The central bank appeared to be relaxed despite weakening in the job market, acknowledging that ‘labour market conditions softened during 2011 and the unemployment rate increased slightly in mid year, though it has been steady over recent months’. Concerning inflation, policymakers believed that near-ended CPI inflation will ‘fall further over the next quarter or two’ while core inflation will hover around 2.5%

The decision to leave interest rates unchanged was driven by the situation that ‘interest rates for borrowers have declined to be close to their medium-term average’ since the last 2 reductions. The central bank believed the monetary policy setting is ‘appropriate’ for the moment. Yet, the RBA pledged that easier monetary policy is still warranted ifthe market conditions deteriorate markedly.

Article source: http://feeds.actionforex.com/~r/ActionInsightallReports/~3/zez1Xqb8JNM/

Global market sentiments are weighed down by worry that Greece might not be able to secure the EUR 130b bailout package from EU/IMF and would face disorderly default in March. Greek leaders gather today again after failing to complete the agreement on details of the austerity measures on Sunday despite having a five-hour long meeting with Prime Minister Papademos. While the principle of cutting 1.5% of GDP of spending in 2012 was agreed, there were issues unresolved, including banking and labor. EU leaders are stepping up the pressure on Greece to finish the details of reforms as French President Sarkozy said today that “time is running out” and Greece’s commitment for bailout needs to be “concluded” and “signed”. German Chancellor Merkel warned that “there can be no new Greece programme if agreement is not reached with the Troika”.

Regarding the details of the packaged that needed to be agreed on, that included cutting government spending by 1.5% of GDP, which was agreed. In additional, there should be measures regarding re-capitalization of Greek banks, reducing labor costs including cut in minimum wages and holiday bonus, cutting civil service jobs and cuts to size of pension programmes

According to Eurostat data released today, Greece’s debt spiked higher to 159.1% of GDP in Q3 of 2011, up from 138..8% a year earlier. Overall debt ratios of Eurozone nations as a whole rose to 87.4% of GDP, up from 83.2% a year earlier. For the 27 EU states, overall debt ratio rose to 82.2% of GDP, up from 78.5% a year earlier. Among the most indebted stats, Portugal’s debt ratio rose 18.9% to 110.1% from a year earlier. Ireland’s ratio also rose 16% to 104.9% from a year earlier. Nonetheless, the good news is that Italy’s debt rose was just 0.5% higher from a year earlier to 119.6% and was actually down from Q2′s number by 1.6%.

IMF cut China’s GDP forecast in 2012 to 8.25%, down from prior projection of 9.0%. That’s a significant slowdown from 2011′s 9.2% growth rate. IMF note that “China’s growth rate would drop abruptly if the euro area experiences a sharp recession.” Nonetheless, IMF said that “China has room for a countervailing fiscal response and should use that space” to provide more stimulus to the domestic economy. And IMF urged that that “monetary conditions should be fine-tuned to allow for some modest additional credit to the economy.”

Australian dollar is slightly lower today as dragged down by disappointing retails sales data, which unexpectedly dropped -0.1% mom in December versus consensus of 0.2% mom rise. TD securities inflation also dropped to 0.2% mom in January. Aussie is also somewhat weighed down mildly by rate cut expectations. RBA are expected to cut the cash rate by -25 bps to 4.0% tomorrow. This third consecutive rate cut since November would bring the country’s monetary policy to mildly accommodative from neutral. Given high uncertainty in global economic outlook and weaker tone in recent domestic developments (rising unemployment, benign inflation and appreciation in AUD), we believe a rate cut is justified. The RBA will release its quarterly Statement on Monetary Policy and policymakers should use this opportunity to communicate more about its rationale of the new policy settings. More in RBA to Cut Interest Rates for Third Consecutive Time in February.

Daily Pivots: (S1) 1.5759; (P) 1.5809; (R1) 1.5869; More.

GBP/USD dips further to 1.5729 so far today as consolidation from 1.5882 temporary top extends. More corrective trading would be seen. But again. near term outlook remains cautiously bullish with 1.5641 cluster support intact (38.2% retracement of 1.5234 to 1.5882). Above 1.5882 will target a test on 1.6165 key cluster resistance (61.8% retracement of 1.6746 to 1.5234 at 1.6168). Break will confirm that whole decline from 1.6746 has finished at 1.5234 already. On the downside, below 1.5641 support flip bias back to the downside for 1.5234 support instead.

In the bigger picture, price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161. At this point, we’re favoring the case that such consolidation is either finished with three waves to 1.6746, or five waves as a triangle at 1.6165. Deeper decline is in favor to 1.4229 key support and decisive break there should extend the long term down trend through 1.3503 low. Meanwhile, strong rebound ahead of 1.4229, or a break of 1.6165, will dampen the immediate bearish view and extend the consolidation from 1.3503 instead.

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:30
AUD
TD Securities Inflation M/M Jan
0.20%

0.50%

0:30
AUD
Retail Sales M/M Dec
-0.10%
0.20%
0.00%
0.10%
9:30
EUR
Eurozone Sentix Investor Confidence Feb
-11.1
-16.5
-21.1

11:00
EUR
German Factory Orders M/M Dec
1.70%
1.00%
-4.80%
-4.90%
15:00
CAD
Ivey PMI Jan

57
63.5

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The Euro continues to be under pressure in Asian trade as the Greek government considers new terms and conditions to the second bailout loan, even as the deadline for their agreement looms. The Greek government has only until noon (GMT) today to advise the E.U. as to whether or not they accept the offered terms, else the €130 billion will not be released and Greece will take a step closer to a disorderly default. As reported at 11:19 a.m. (JST) in Tokyo, the Euro was trading down 0.4% versus the U.S. Dollar, holding at $1.3105 after dropping to $1.3075 earlier in the session. Analysts expect that the Euro could test $1.30 again today.

The Greek saga overshadows the euphoria felt after Friday’s release of U.S. labor data which was unexpectedly robust and included another decline in the unemployment rate to 8.3%, a 3-year low. That news helped to lift the U.S. Dollar against the Japanese Yen, which traded at 76.74 Yen, a gain of 0.7%. One currency strategist says that she expects the Japanese Yen will once again continue to power higher over the greenback, given the historical relationship between the pair. The U.S. Dollar Index, which measures the greenback’s value against a weighted basket of major currencies, rose to 79.00 .DXY.

Article source: http://www.dailyforex.com/forex-news/2012/02/Greek-Decision-Weighs-on-Euro/10785