The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( BBH FX Strategy) -- The combination of a 50-basis-point cut in China's required reserve ratios and anticipation that the European finance ministers will sign off on the second aid package for Greece has lifted equity markets and most non-dollar currencies. The MSCI Asia-Pacific Index rose 0.8%. Hong Kong' Hang Seng Index was the lone exception in Asia, slipping 0.3%. Higher-than-expected inflation (6.1% vs. the consensus of 5.8%) may have played a role, but losses were widespread, led by oil and gas (-2.2% consumer services (-1.9%) and technology (-1.85). > > Bull or Bear? Vote in Our Poll European bourses are higher with the Dow Jones 600 up 0.8% near midday in London. Basic materials, industrials and financials are leading the advance. U.S. and Canadian markets are closed, but the key event today is the European finance ministers' meeting. There are still a number of issues that need to be worked out, including the mechanisms for surveillance of the implementation. Talk continues about the establishment of an escrow-like account. In addition, the interest rate on the European Union/International Monetary Fund aid may be further cut. It had begun near 5% and had been cut last year to 4%. Another cut, especially if retroactively applied, could further reduce projected debt-to-GDP ratios. Oil prices are rising on news that Iran will halt crude exports to France and the U.K. Combined, the two countries absorb about 3% of Iranian's oil sales. European crude and product inventories are estimated at 120 days of consumption. The euro has been range-bound for several weeks. Last week it tested the bottom end of the range at $1.2980-$1.3000, and it largely held. By the rule of alternation, it is now poised to test the upper end of the range, seen in the $1.3300-1.3320 area. The pound has also recovered smartly off last week's low near $1.5645. The $1.5930 area marks the last high, but the more important cap is seen around $1.60. The yen is consolidating last week's sharp losses, following the Bank of Japan's unexpected 10 trillion yen in new Japanese government bond purchases announced on Feb. 14.
The dollar moved to almost 80 yen in early Asia, the highest level since the middle of last July, before consolidation set in during the European session, as broader-based dollar selling proved too much.