Reassuring debt auctions and positive signs of progress on Greek debt restructuring has shored-up the single currency, but some commentators believe not enough is being done to secure the Greek financial debt.Foreign currencies in Asia Pacific made steady gains on the positive euro-outlook, but flat manufacturing figures from China held most currencies back from making any substantial gains. The Australian dollar inched higher, helped once again by the Reserve Bank of Australia’s interest rate intervention.JPMorgan economist Tom Kennedy commented: "Despite the decline in the current quarter, Australia's terms of trade index remains at levels that are historically very high, and is likely to remain elevated, with global demand for key commodities iron ore and coal expected to underpin export prices."This market confidence could be short lived, however, with Bloomberg reporting that whatever the outcome of the Greek debt restructuring talks, it won’t solve Greece’s debt problem.
The deal only involves private creditors, and doesn’t include debt owed to the European Central Bank or the International Monetary Fund. This means the eventual outcome of the talk can only reduce the debt burden by 30 per cent, rather than the 50 per cent Greece requires.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site