Analysis / Daily / Finance / forex

Greece Defers Payments – Euro Steady.

One Pound
The pound remained higher against the dollar on Thursday after the Bank of England left interest rates on hold at their current record lows. GBP/USD was at 1.5402, 0.41% higher for the day, from around 1.5420 ahead of the announcement. The BoE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that level since March 2009. The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion. The bank published no rate statement and the minutes of the meeting are due to be published in two weeks’ time. The announcement came a day after survey data showed that the U.K. service sector expanded at the slowest rate in five months in May, indicating that growth could struggle to pick up in the current quarter after a weak first quarter.

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The euro was almost unchanged against the U.S. dollar on Friday, after the release of upbeat German factory orders data as sentiment on the greenback improved ahead of the day’s highly anticipated report on U.S. employment. EUR/USD hit 1.1248 during late Asian trade, the session high; the pair subsequently consolidated at 1.1231. The pair was likely to find support at 1.1078, the low of June 3 and resistance at 1.1327, the high of the 19th May. Official data earlier showed that German factory orders increased by 1.4% in April, beating expectations for a 0.5% gain. The change in factory orders for March was revised to a 1.1% rise from a previously estimated 0.9% uptick. Meanwhile, concerns over Greece slightly eased after the country deferred a series of debt payments it owes to the International Monetary Fund until the end of the month. The decision came as talks between Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker in Brussels on Thursday ended without an agreement to unlock more financial aid before the country runs out of money.

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The U.S. Dollar Index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.21% to 95.69 overnight, the dollar was steady against a basket of other major currencies on Thursday, after data showed that he number of people who filed for unemployment assistance in the U.S. last week fell more than expected and investors eyed Friday’s employment report. The U.S. Department of Labour said the number of individuals filing for initial jobless benefits in the week ending May 30 declined by 8,000 to 276,000 from the previous week’s revised total of 284,000. Analysts had expected initial jobless claims to fall by 5,000 to 279,000 last week. The report came after data on Wednesday showed that the U.S. private sector added 201,000 jobs last month, slightly ahead of expectations for 200,000 indicating that the recovery in the labour market is on track. Investors were looking ahead to Friday’s nonfarm payrolls report for further indications on the strength of the U.S. job market.

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