Euro dips as Greek deal still not reached

The Euro has taken a hit today as a meeting between members of Greece’s coalition government failed to result in an agreement over tight austerity measures which would allow the EU and International Monetary Fund to hand over cash which the country could use to pay off its debtors. An agreement has to be made today of Greece wants 130 billion euros it can use to pay off lenders in March.

The euro was at $1.3110. In early trade it dropped as low as $1.3080. Against the yen the euro hit 100.43, and was close to record lows against the currencies of New Zealand and Australia, according to a Reuters report.

Arab Bank trader David Scutt said that many analysts believed that the Greek deal would go ahead, even if it was not until the very last minute, and this is why there has been renewed buying. The lack of a resolution over Greece’s debt problem took the focus away from encouraging news out of the US where jobs were created at a faster pace in January than in any of the past nine months. Unemployment is now down to 8.3 per cent, the lowest level in three years.

In Australia the markets are awaiting retail results and a decision on interest rates from the reserve bank. Analysts are predicting that retail will have gone up by 0.6 per cent during the fourth quarter.

It is likely that the bank will introduce a rate cut because of inflation, commodity prices and employment indicators. However, this is not expected to prevent the Australian dollar rising against its US counterpart.