EU Morning Report - Halleluiah (?)

The euro looks stronger against most of its major counterparts after the eurozone Finance Ministers reached an agreement on Greece’s second bailout. The negotiations lasted 13 hours, settling in measures that are expected to cut the troubled nation’s debt to 120.5% of gross domestic product by 2020. This is half a percent higher than a previous estimate of 120%. Private sector holders of Greek bonds will assume losses of 53.5% on the nominal value of their holdings. Again this is above the 50% haircut they agreed on October 26^th. The financial aid of EUR 130 billion by 2014, is subject to strict conditions. It will nevertheless prevent a looming Greek default. A report put together by the European Union, European Central Bank and International Monetary Fund highlights that Greece’s woes are far from over and the bailout program is “accident-prone”.

The US dollar appears softer versus a basket of currencies as news from Europe, increased risk appetite. Against the Swiss franc, the greenback reached a multi-week low at 0.9086. The US dollar retraced to 79.61 from 79.77 versus the Japanese yen.

The Australian dollar recorded loses against the US dollar, sliding from 1.0799 to 1.0723, following the joint announcement by China and Japan to assist IMF with any funding request. The British pound fell to 1.5828 from 1.5865 versus the US dollar.

Oil fell to 104.64 from 104.80 dollars a barrel. Gold rose to 1733.38 from 1723.25 US dollars an ounce. Against the euro, gold advanced to 1310.03 from 1309.34 an ounce. Silver moved up to 33.4947 from 33.2450 dollars an ounce.