The Great Britain pound slipped versus the US dollar as investors shunned European assets after private holders of Greek debt suffered losses on Greece’s bonds. The currency was still up against the euro and the Japanese yen.
Greece used collective action clauses to increase participation of investors in the bond swap program. As a result, the International Swaps & Derivatives Association announced that “a Restructuring Credit Event has occurred with respect to The Hellenic Republic (Greece)”. This ruling triggered payouts on about $3 billion of default insurance.
The pound fell against the dollar also because the US currency was too strong after US nonfarm payrolls came out better than expected. As for Britain’s fundamentals, the data was mixed. The Bank of England decided on March 8 to keep its main interest rate at 0.5 percent and asset purchase program at £325 billion.
GBP/USD slumped from 1.5827 to close at 1.5670, while the intraday minimum of 1.5661 was lowest since February 23. At the same time, EUR/GBP was down from 0.8380 to 0.8370 (the daily low was 0.8344) and GBP/JPY was up from 129.06 to 129.22.
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