Major Pairs Analysis: Greek Public Sector Layoffs, EU/IMF Requirement
ICM Brokers | Apr 29, 2013 07:46AM ET
Greek lawmakers passed a bill including plans to fire 15,000 workers by the end of next year, as Prime Minister Antonis Samaras and his government cleared the latest hurdle to receiving international aid payments. A total of 168 lawmakers voted in favor of the law, 123 against and one cast a “present” vote, Parliament Speaker Yannis Tragakis said. Identifying redundant positions and adopting a system will lead to mandatory exits for about 150,000 civil servants by 2015. This is a requirement of the euro area and IMF, which have pledged a total of 240 billion euros to Greece over the last three years.
GBP/USD
The pound jumped the most in nine months against the dollar this week, as a government report showed the U.K. economy avoided a recession last quarter, damping speculation the BoE will boost stimulus. The sterling strengthened versus all except one of its 16 major counterparts as Chancellor George Osborne said the data was an encouraging sign. The BoE meets on May 8-9, after policy makers were split this month whether to extend the 375 billion-pound ($581 billion) asset-purchase program that tends to devalue a currency. U.K. government bonds fell as the gross-domestic- product report spurred demand for higher-yielding assets.
USD/JPY
Bank of Japan board members forecasting an end to more than a decade of deflation may need to add to an already unprecedented monetary stimulus plan should consumer prices fail to align with their projections by October. The nine-member panel yesterday predicted that consumer prices, excluding a pending sales-tax increase and volatile fresh food costs, will rise 0.7 percent in the year through March, then 1.4 percent and 1.9 percent in the following two years. The measure slid 0.5 percent last month. Since mid-November, the yen tumbled 18 percent and the Nikkei climbed 60 percent on optimism about Abenomics. Yesterday, Abe’s economic adviser, Etsuro Honda, said that the BoJ would achieve a 2 percent inflation goal.
USD/CAD
Canadian stocks fell for the first time in seven days, paring a weekly gain after data showed the U.S. economy grew at a slower pace than forecast. TransCanada Corp. dropped 1.3 percent after the pipeline builder said delays in getting a U.S. presidential permit for the Keystone XL oil conduit will push back its start until the second half of 2015. Suncor Energy Inc., Canada’s largest energy producer, lost 1.1 percent as crude retreated for the first time in seven days. Suncor lost 1.1 percent to C$29.28 and Canadian Natural Resources Ltd. dropped 2.1 percent to C$29.58. Crude for June delivery declined 0.7 percent to settle at $93 a barrel in New York to trim the biggest weekly advance since June. Prices rose 5.7 percent this week.
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