WORLD FOREX: Euro Firm, All Eyes On Greek Debt Swap Deal

Friday, Mar 09, 2012

-- Euro firm on anticipation over Greek debt swap deal

-- Dollar strong against yen before U.S. jobs data


 
   By Alexander Martin 
   Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)--The euro was firm against the dollar and yen during Asian trading Friday as markets await the formal announcement at 0600 GMT of investor participation in a massive bond-swap deal involving Greece's private-sector creditors.

Over 80% of private investors had agreed by a Thursday deadline to give up over half of the face value of their existing bonds in a EUR206 billion swap, a senior Greek government official said late Thursday, enough to touch off a massive debt swap that would reduce the country's huge borrowings and mark a key moment in Europe's efforts to tackle its debt crisis.

Wide acceptance of the offer means that Greece would almost certainly use legal maneuvers to impose the exchange on the bulk of reluctant creditors. The action would likely also trigger credit default swaps.

"Steps toward a successful Greek debt swap are likely to be positive for the euro in the near term," said Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo, adding that attention should also be paid to what negative effects a CDS credit event could have on other euro-zone nations like Portugal, whose bond yields are yet to fall back.

If Greece decides to invoke collective action clauses to rope in reluctant creditors, it must consult with its euro-zone rescuers--a teleconference of euro-zone finance ministers is scheduled for 1300 GMT.

Away from Europe, the market will also closely watch U.S. February employment data due at 1330 GMT for signs of improvement in the world's largest economy.

Economists expect non-farm payrolls to gain by 213,000 and the jobless rate to stay unchanged at 8.3% in the month, according to the results of a survey by Dow Jones Newswires.

Traders said the dollar was buoyed against the yen by improved market sentiment over the outcome of the Greek debt swap deal and expectations of healthy U.S. jobs figures.

Junya Tanase, chief forex strategist at JP Morgan in Tokyo said that both the dollar and yen will be sold if the jobs data exceed market expectations and spur investor risk appetite, which could also lead to a rise in yen-crosses.

"There is high possibility the USD/JPY could climb, at least in the near term," if the jobs data prove to be stronger than expected, he said.

Tanase added that the dollar could rise over Y82.00, pushing forward expectations of a rate hike by the U.S. Federal Reserve.

As of 0450 GMT the euro was at $1.3268 from $1.3274 late Thursday New York trading, according to trading platform EBS. The common currency was at Y108.53 from Y108.26. The dollar was at Y81.80 from Y81.55.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 79.197 from about 79.148.


 
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan            81.81-82       81.54-57  +0.32    81.89    81.54  +6.37 
EUR/USD Euro            1.3266-70      1.3273-78  -0.06   1.3277   1.3258  +2.37 
GBP/USD U.K.            1.5820-24      1.5828-33  -0.06   1.5832   1.5812  +1.80 
USD/CHF Switzerland     0.9086-90      0.9078-86  +0.07   0.9092   0.9082  -3.04 
USD/CAD Canada          0.9891-97      0.9900-05  -0.09   0.9915   0.9894  -3.10 
AUD/USD Australia       1.0653-58      1.0641-45  +0.12   1.0663   1.0618  +4.38 
NZD/USD New Zealand     0.8268-74      0.8240-46  +0.34   0.8276   0.8230  +6.36 
 
Euro Rate 
 
EUR/JPY Japan           108.52-56      108.25-32  +0.24   108.64   108.16  +9.02 
 
Source: ICAP Plc.