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March 2015

Daily Currency Insight

Published: Thursday 12 March 2015

Greece has been afforded a little breathing space as the EU allowed them to take back €550 million to meet immediate commitments. In the overall picture, this is little more than a pencil stroke but it does show the EU's caring side; something we are not that familiar with. It hasn't helped the euro one jot though; against the USD, the shared currency is at the weakest it has been since 2002 and against the Pound, we are back at levels not seen since November 2007; levels that precede the major fall brought about by the financial crisis. A cautionary note for Euro buyers is that Sterling is showing signs of being seriously overbought so there is a lot of scope for a correction and that could take us back to €1.36. Strength in the US Dollar has had the effect of weakening many other currencies. So we have seen the South African Rand displaying the sort of weakness we last saw in January 2014 and we have seen the NZ and Australian Dollars weaken as well; albeit less dramatically. The Reserve Bank of New Zealand is due to meet late this evening (UK time) and no change is forecast to their 3.5% base rate. However, there is scope for volatility dependent on what Governor Wheeler unveils as their method of controlling the housing market without raising interest rates. Tonight would be a great occasion for both NZD buyers and sellers to place 'tongue in cheek' market orders to see if they can grasp the opportunity. Before we get to that, we will get UK industrial and manufacturing data. Both sets of data are forecast to be quite upbeat, so Sterling has the capacity to strengthen but, as against the Euro, the Pound is remarkably overbought on most exchange rates. The risk of a fall in Sterling's value mounts with each passing day. Please don't get caught out. That is about all there is to report today. The 2nd week of the month does tend to lack data, so this is not such a surprise but the next week is a doozy as they say. Oh and North Korea's leader, Kim Jong Un has acknowledged International Women's Day. That is a day to celebrate remarkable achievements by women around the world and across the centuries and in many cases, against all odds. The leader's contribution was to give makeup to wives of air force personnel. I guess they will have to use the makeup for fear of retribution but you can't help thinking he has missed the point somehow. Read more Currency Reports