Kiwi Higher In Early Trading On Yields; Euro Drifts As PSI Back In Focus

By David Liu,

Weekend Developments
  • Greek sovereigns downgraded by Moody’s to Ca, by S&P to CCC
  • Ratings agencies warn that a restructuring may be increasingly likely, Greece may ask for third bailout
  • PSI negotiations will continue this month
  • Ratings agencies sees possible haircut of 70-80%

Risk appetite this morning was relatively mixedthis morning in early trading as markets weighed additional carryflows with possible continued sovereign debt troubles in Greece,Portugal and Italy. After last week’s EUR 529.5 billion in 3 year loans to the Eurozone’s commercial banks, thefocus is expected to return this week to ongoing private sectornegotiations with Greece and various holders of Greek debt. Reportsstate that current PSI negotiations continue to be around the totalamount of conversion from old debts to new debts, while the yieldon newly issued Greek bonds are to have been agreed on.

While ratings agencies Moody’s andS&P downgraded Greek debt again last week to record lowestlevels, citing that complete negotiations by March 8 th of this month were a prerequisite forGreece’s second bailout in time for its March 20 th maturity deadline, negotiations are expected tocontinue into the rest of the month. Further warnings from theGerman Finance Ministry and ECB that the amount of participationmay not be as high as expected could continue to pressure the Eurolower.

At the time of writing, commodity currencies led gainers against the Greenback, while the Euro is the weakest performer among the majors.

--By David Liu, DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/05/Weekend_03042012_Greek-PSI-Back-In-Focus.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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