The euro remained on the backseat for yet another day as the recent rise of the Dollar and fresh news from Greece weighed down on the currency that reached the 1.0900 support. While the Dollar is receiving more support as we mentioned above the news from Greece reiterate how complicated a solution to the Greek problem is. With the IMF repeating that they are not prepared to participate in another program without some kind of debt relief or restructuring and Greek PM Tsipras facing opposition voices within its own party a permanent solution is still far away. We could see a bounce from the 1.0900 support today but the sentiment remains bearish and any uptick should be treated as an opportunity to sell higher.
The dollar held steady against the euro and other major currencies on Friday, as markets digested the previous session’s upbeat U.S. economic growth data and as expectations for a U.S. rate hike in September continued to support. EUR/USD was little changed at 1.0937, up from Thursdays’ one-week lows of 1.0892. he Commerce Department reported on Thursday that U.S. gross domestic product expanded at an annual rate of 2.3% in the three months to June. First quarter growth was revised up to 0.6% from a previously reported contraction of 0.2%. Although economists had forecast growth of 2.6% the report still indicated that the economy is on a solid footing. The U.S. Dollar Index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 97.55, down from Thursday’s one-week high of 97.89.
Oil prices have fallen today as concern over global oversupply intensified after the head of oil producers’ cartel OPEC indicated there would be no cut-back in production, although a fall in the U.S. dollar put a floor under prices. Brent is heading for its fifth weekly fall after prices shed gains early in the session and reversed into negative territory. Suggesting there would be no reduction in oil output among member states, Abdullah al-Badri, secretary-general of the Organisation of the Petroleum Exporting Countries, said yesterday that rising demand would prevent a further fall in oil prices. Badri added that even if OPEC had cut output by as much as 2 million barrels per day (bpd,) it would not have helped prices. OPEC members produced around 31.25 million barrels per day in the second quarter, about 3 million more than daily demand, a Reuters survey showed this week.