FOREX NEWS | CURRENCY NEWS BY FOREXLIVE

Greek FinMin: Only one step left to complete Greek debt swap–Reuters

• Negotiations over second bailout are rough

1.3200 barriers rumored again

Every time we stall, talk of barriers pops up…This time there is talk of a 1.2600/1.3200 double-no-touch.

Remember how we bounced from ahead of 1.2600? Food for thought.

EUR/USD making run at key 1.3200 level

Stops above there, if we make it…1.31945 the EBS high so far. Further resistance at 1.3135/40.

ECB’s Nowotny sees similar demand for LTRO2 and LTRO1

• 2012 inflation clearly below 2%
• ECB on constant alert for inflation
• Banks have enormous refinancing needs
• Austria top 3 banks unlikely to need aid

Bloomberg headlines via local Austrian newspaper interview.

Just as a reminder, the first 3-year LTRO saw EUR 490 bln borrowed by European banks…

Let’s suppose Greece and the IIF reach a deal…

Is it bullish for the euro?

No. It is only bullish in the context of taking the chaos of failing to reach a deal off the table. A failure would radically increase the odds of an uncontrolled default.

Almost all observers agree that even after  a “successful” debt swap Greece will have trouble paying its remaining debts.

The debt swap is pretty much an asymmetrical risk…All to the downside. Taking the downside off the table if they do a deal today may be good for a pop but it is not a sustainable plus as Greece is a twice-bailed out financial black hole.

 

Reuters: Greek official says EU will not fill any funding shortfall after second bailout

• But there are other ways, the official says

Greece. A never ending story.

Panic at the Fed? Naw, says Dudley

• Late 2014 rate target not a sign of panic
• Consumers may be at the end of the deleveraging problem

EUR/USD racing northward after the Dudley comments. 1.3180/85 resistance is fast approaching. 1.3200 is key.

More Dudley dovishness

• Expects unemployment quite high at end of 2012
• US unlikely to need to confront an inflation bubble
• Significant deceleration of inflation seen

Which way to you think he will vote come March?

Boe’s Miles; February QE3 not a done deal

• Will hinge on forecasts
• CPI on pretty steep downward path, more confident it will fall as forecast
• Substantial spare capacity in UK economy, will persist
• Technical recession in UK would be no great surprise

On balance, pretty dovish comments despite the hawkish headline. Vai Reuters.

Cable is all over the shop. I am guessing there was a massive fixing order to sell the pound and we are now rebounding with the fix out of the way.

Dudley as dovish as you would expect

Policy actions in housing, fiscal policy and structural adjustment of the U.S. economy are essential to achieve economic recovery, which remains sluggish by historical standards, said a top Federal Reserve official Friday.

Unemployment is “likely to remain unacceptably high for the near term,” said William Dudley, president of the Federal Reserve Bank of New York, speaking at the quarterly regional economic press briefing.

According to the WSJ.

I guess we know why the Fed sold those $7 bln in mortgage-backed securities to Credit Suisse last week. They needed to get them into the market so they cab buy them back again…