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THE TIPSTER

Kathleen Brooks
WITH all attention on the plunging pound this week, the euro has been relatively quiet. But euro-US dollar could come back to centre stage since the clock is ticking for the Greek government to demonstrate that it’s taking effective steps to reduce its huge debt. Prime Minister Papandreou meets Angela Merkel of Germany on Friday and markets are hoping that at, the very least, there will be a bit more clarity on how these problems are going to be resolved, easing the pressure on the euro. Friday is, of course, Non-Farm-Payrolls day – the monthly US employment numbers, which can cause volatility in the markets. If the number of jobs created by the US economy is worse than expected, it could affect sentiment towards the US dollar and boost the euro in the near-term. IG Index is quoting a $1.3600 euro call option, expiring a week on Friday, that will cost you 75 points. If, by 12 March, the euro is above $1.3675 then the option will expire in profit. Investors can also sell their call at any time before then during normal market hours.

The Australian dollar staged a rally after interest rates were hiked 0.25 per cent to 4 per cent yesterday. This pushed the Aussie dollar significantly higher against the New Zealand dollar. Right now the Aussie is testing the 18-month high of NZ$1.3000, and if it can sustain a break higher at this level, then the currency could appreciate further. Capital Spreads offers NZ$1.2960-NZ$1.2972 for Aussie dollar-New Zealand dollar.

The Bank of Canada kept interest rates at 0.25 per cent yesterday and the Bank was fairly dovish in its commentary after the rate announcement. If rates remain low, then this is bad for the Canadian dollar. Capital Spreads offers CA$1.0298-CA$1.0302 on US dollar-Canadian dollar.