Euro Exchange Rate Today: EUR focuses on economic data, despite Greek Govt facing 'immense problems'

Last Updated on Wednesday, 08 February 2012 10:17 Written by Will Peters Wednesday, 08 February 2012 10:13

Euro Rate Today: The euro dollar exchange rate is 0.03% higher on yesterday's close at 1.3263, the euro pound exchange rate is 0.1% lower at 0.8883.

Leading into this morning's session we see that, "the euro suffered somewhat after German industrial output in December fell by 2.9% m/m vs 0.0% consensus. Our European economist notes that the positive surprises in leading indicators are yet to be reflected in hard data. It's still too early to say if activity is improving. In y/y terms, German IP looks unlikely to drop deep into negative territory," says a morning exchange rate note from UBS.

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Dow Jones reported that the meeting between Greece’s party chiefs has been pushed back for a second time to Wednesday.

Greek officials cited ‘technical details’ for the delay but based on commentary throughout the day there is clearly significant outstanding disagreement.

Greek conservative leaders Samaras said that he is still opposed to cuts in pensions, which would deepen the recession.

He noted that the document on the reform package is still being awaited and the details are needed before he decides to back the measures.

German media reported overnight that despite reports of a deal, the troika believes Greece’s government has ‘immense problems’ and is unable to carry out already-approved reforms, citing the draft report of the three institutions providing financing.

According to the wall Street Journal, the ECB is now willing to exchange Greek bonds with the EFSF, but will not take any losses on the exchange.

Sources note the exchange will contribute to Greece’s debt reduction though it is dependent on the PSI being completed. National Central Banks of the Eurozone will not participate, probably to obviate fears of legal challenges surrounding the perception of a fiscal transfer.

German Chancellor Merkel said she rejected a Greek exit of the Eurozone and that question ‘doesn’t arise’. She warned that such a step would be of ‘incalculable impact’, but also warned that current situation is very complicated and there is a lack of ‘transparency’ on the part of domestic leaders.

The IIF’s representatives have left the Greek PM’s office after talks on the PSI. No deal was announced, but key leaders of talks have stated that fresh negotiations with private-sector creditors will continue in Paris.

The ECB reported it provided Italian banks with EUR202.6 bln of funding in January, down from EUR209.995 bln in December.

"Our Italian banks analyst notes that banks are all saying that most of the ECB funds have not been used for the lending/carry trade, rather just kept as liquidity buffers for forthcoming bond maturities. Customer funding is OK, with deposits and retail bonds flat since the summer. ECB use will likely go up materially in February because of the 3 years LTRO and banks may become more aggressive in carry trades provided there is clarity on both Greece and EBA methodology," say UBS.