LSE: Euro At Multi-year Low Vs Pound; Awaits Euro Group Meeting For Greece Bailout
BRUSSELS (Alliance News) - The euro declined to a multi-year low against the pound in European deals on Wednesday, as traders remain wary ahead of the Eurozone finance ministers meeting in Brussels, where Greek leaders would renegotiate its bailout deal with EU creditors.
Greek government is expected to ask for a bridge loan to cover its funding needs until September, and to loosen the tough conditions of the EUR240 billion bailout at the Euro group meeting taking place later ?in the day.
Speaking on the sidelines of G20 meeting in Istanbul, European Economic Affairs Commissioner Pierre Moscovici told that Greek talks should be within the framework of the existing programme, which acts as "reference."
German Finance Minister Wolfgang Schaeuble discarded rumors of a Greek debt deal on Tuesday, saying the existing programme would be reviewed by the Eurogroup finance ministers at the meeting.
Bundesbank President Jens Weidmann also took a tough stance on Greece, saying "The question of a bridge loan via T-bills has as a precondition, in my view, that it's not a bridge to nowhere."
Meanwhile, Greek Defense Minister Panos Kammenos warned that the country would try to get funding from other sources outside the EU, including Russia or China, if it fails to strike a new debt deal.
European markets also fell ahead of the meeting, despite the release of mostly positive domestic corporate news.
The euro depreciated to 0.7390 against the pound for the first time since January 2008. At yesterday's close, the pair was valued at 0.7419. Extension of the euro's downtrend may see it finding support around the 0.725 mark.
The euro has been lower against the greenback during European deals, with pair trading at 1.1304. The pair was valued at 1.1320 when it closed Tuesday's trading. On the downside, 1.10 is seen as the euro's next support level.
Although the euro declined to 1.0440 against the Swiss franc at 4:05 am ET, it climbed back to a 2-day high of 1.0504 immediately and showed lackluster trading since then. The pair finished yesterday's deals at 1.0484.
Meanwhile, the euro firmed to a 3-week high of 135.66 against the Japanese yen, from Tuesday's closing value of 135.16. Next key resistance for the euro may be located around the 140.00 mark.
