Analysis / Daily / Finance / forex

It’s a Crisis Jim, But Not As We Know It

One Pound

GBP/USD is trading moderately lower ahead of the European morning as the risk sentiment took a hit in the Asian session on faltering Greece debt talks. The spot market clocked a high of 1.5751 but failed to sustain and dropped below 1.5749 The European currencies are seem to be struggling as we move into the weekend on renewed fears of Grexit. The Greek debt talks fell apart on Thursday and attention now shifting to a last ditch effort on Saturday before the 30th June deadline. Apart from the Greece issue, the investors should watch out for BoE governor Mike Carney’s speech due later today.

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The euro inched down against the dollar yesterday but remained above 1.12, as an emergency meeting in Brussels ended without a resolution in the Greek Debt crisis and the timing of a rate hike by the Federal Reserve remained in focus. EUR/USD lost 0.001 or 0.02% to 1.1205, moving lower for the third time in four sessions. The euro is on pace to close the week down more than 1.3% against the dollar, after suffering one of its worst one-day declines of the year on Tuesday. In Thursday’s session, the currency pair traded in a range of 1.1154 and 1.1227.In Brussels, the two sides in longstanding Greek Debt negotiations concluded talks on Thursday without reaching a deal. During the emergency two-day meeting, both sides presented revised proposals that could unlock critical stimulus aid to Greece thought to be necessary in order to avoid bankruptcy. The high-level talks included members of the European Central Bank, International Monetary Fund and European Commission. Yesterday’s developments had little impact on stocks in Greek banks. Greece is running out of time before it owes the IMF a bundled payment of EUR 1.5 billion on Tuesday.

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The dollar pared gains against a basket of other major currencies in subdued trade on Thursday, after upbeat U.S. economic reports as investors continued to monitor ongoing Greek debt negotiations. The Commerce Department said that personal spending rose by 0.9% in May, above expectations for a gain of 0.7%. Personal spending rose 0.1% in April, whose figure was revised up from a previously reported flat reading. The report also showed personal income rose by 0.5% in May, in line with forecasts and after rising 0.5% in April. Separately, the U.S. Department of Labour said the number of individuals filing for initial jobless benefits in the week ending June 20 increased by 3,000 to 271,000 from the previous week’s total of 268,000. Analysts had expected initial jobless claims to rise by 4,000 to 272,000 last week. The U.S. Dollar Index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.39, after hitting highs of 95.70 earlier in the day.

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