The Euro has weakened on speculation that EU leaders will fail to agree on an aid package for Greece at a summit this week.
Pound Sterling – UK Markets
The Pound managed to recover in yesterday’s trading having hit lows against the Dollar. UK exchange rates had been pushed lower amid speculation that Dubai World will prolong the repayment of its loans, harming earnings at UK banks that serviced the state-owned Emirati company.
At 1022 GMT Sterling traded around 1.5066 versus the greenback and 1.1134 against a weakened Euro.
The key event for the week will be the release of the government's budget for the 2010-11 fiscal year, which is due Wednesday.
US Dollar – US Markets
The Dollar headed towards a three-week high against the Euro as the situation in Greece tarnished the single currency stoking demand for the greenback as a refuge.
At 1002 GMT the dollar traded at EUR 0.7390 whilst touching GBP 0.6637.
More reports on housing are due tomorrow and on Thursday a testimony by Federal Reserve Board Chairman Ben Bernanke will be expected to cause shifts in the exchange rates.
Euro – European Markets
There is speculation that the Euro may fall toward USD1.20 for the first time since March 2006 due to wrangling over the Greek crisis.
The chances that Greece will leave a March 25-26th summit empty-handed increased as Trichet’s demand for stringent terms and German Chancellor Angela Merkel’s push for sanctions against nations that breach deficit limits left the situation up in the air.
Prime Minister George Papandreou said he’ll turn to the International Monetary Fund for aid if it became necessary and the outlook is certainly bleak.
This morning at 0957 GMT the single currency traded at GBP0.8981 and USD1.3531.
Other Currencies – Highlights
The Yen declined against all of its 16 major counterparts as an advance in Asian stocks encouraged investors to buy for higher-yielding assets.
Meanwhile Australia’s Dollar slipped 0.3% against US currency and traders believe it could fall further.
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