Analysis / Daily / Finance / forex

Investors on Edge Ahead of Greek Referendum

One Pound

The dollar hasn’t moved much overnight as markets are focused on the Greek referendum which takes place this weekend. Looking ahead to potential dollar strength, the Federal Reserve is still expected to go ahead with a rate hike in September despite a mixed job report for June, economists said Friday. “We came into work this morning thinking the Fed would move in September and we feel even more confident right now” after the June data, said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. The U.S. created 223,000 new jobs in June, close to analyst expectations, and the unemployment rate dropped to 5.3%, a seven-year low. But economists were muted in their enthusiasm for the report because employment gains in April and May were revised down by 60,000 jobs. The Fed has four policy meetings left this year: July, September, October and December. Fed officials were divided at their last meeting over whether they would hike rates once or twice over this period. The U.S. central bank is expected to sit on its hands at its next meeting on July 28 and 29, in part because of the uncertainty over the Greek crisis. This should not be a concern at their next policy meeting on September 16-17. “By the time we get to September, we’ll know if Greece is having a big effect on financial markets

euro

EUR/USD is trading in a very narrow range on Friday, with all the attention turning to Sunday’s Greek referendum. Greek PM Tsipras speaking in an interview broadcast on the Antenna TV station stepped up his call for Greek to reject lenders’ terms in the referendum Sunday, saying the country will have a financial-assistance deal within 48 hours after the vote. Tsipras added if ‘no’ wins, “I can assure you that the next day I will be in Brussels and there will be a deal.” Expect all euro crosses to be choppy today but one thing is for sure, Monday’s morning trading session is going to be interesting. If you are looking to buy or sell euros – limit or stop loss orders which VFX provide may be worth a look.

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The dollar hasn’t moved much overnight as markets are focused on the Greek referendum which takes place this weekend. Looking ahead to potential dollar strength, the Federal Reserve is still expected to go ahead with a rate hike in September despite a mixed job report for June, economists said Friday. “We came into work this morning thinking the Fed would move in September and we feel even more confident right now” after the June data, said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. The U.S. created 223,000 new jobs in June, close to analyst expectations, and the unemployment rate dropped to 5.3%, a seven-year low. But economists were muted in their enthusiasm for the report because employment gains in April and May were revised down by 60,000 jobs. The Fed has four policy meetings left this year: July, September, October and December. Fed officials were divided at their last meeting over whether they would hike rates once or twice over this period. The U.S. central bank is expected to sit on its hands at its next meeting on July 28 and 29, in part because of the uncertainty over the Greek crisis. This should not be a concern at their next policy meeting on September 16-17. “By the time we get to September, we’ll know if Greece is having a big effect on financial markets.

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