Analysis / Daily / Finance / forex

Greek Drama Proves to be Storm in a Teacup

One Pound

The pound rose against the dollar on Friday as hopes for a deal to avert a Greek exit from the euro zone and rebound in Chinese shares bolstered investor confidence. GBP/USD hit highs of 1.5551, the most since July 7, before pulling back to 1.5494 in late trade, ending up 0.79% for the day. The pound was lower against the euro, with GBP/EUR down 0.18% late Friday. Sterling pared back some gains against the dollar after Federal Reserve Chair Janet Yellen said the central bank was on track to raise interest rates at some point this year.


The euro steadied on Monday after an early slip while Asian shares swung higher as European leaders pressed on with talks for a Greek deal and Chinese trade data beat forecasts in a promising sign for global demand. The moves were mild amid news Euro zone leaders had met through the night to discuss a compromise proposal on a third bailout for  Greece. Euro zone leaders had told the cash-strapped Greek government it must enact key reforms this week to restore trust before they would talk of financial rescue. After an initial slide to $1.1090, the single currency quickly steadied to $1.1135. Likewise, the euro pared its losses against the yen to stand at 136.58 after a drop to 135.40. Idling the euro were rumours the European Central Bank had agreed to delay a Greek repayment of 3.5 billion euros that had been due on 20th July.


The dollar remained broadly lower against a basket of other major currencies on Friday, as hopes for progress in Greece debt negotiations continued to support demand for riskier assets. The U.S. Dollar Index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.73% to 95.96 late Friday. Elsewhere, the dollar was higher against the yen, with USD/JPY up 1.01% to 122.56 and lower against the Swiss franc, with USD/CHF tumbling 1.10% to 0.9373. Meanwhile, USD/CAD rose 0.17% to trade at 1.2729 after data showed that the number of employed people in Canada declined by 6,700 in June, compared to expectations for a 10,000 drop. The number of employed people rose by 58,900 in May.

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