Euro Weakens On Greek Proposal News

This week has solely been focused on the ongoing negotiations between Greece and their creditors with sentiment initially buoyed in the early stages of the week. Weekend reports revealed that Greece had formed a new set of proposals which some believed could be used as a basis for negotiations ahead of talks later in the week. However, in a counter-intuitive move, EUR actually weakened on this news amid a resumption of carry trade flow with hawkish comments from Fed’s Powell helping to prop up the greenback. As the week progressed it became clear that no such deal would be struck at the Eurogroup meeting with neither side willing to back down and concede to the other’s demand. Given that the June 30th IMF payment is drawing ever-closer this soured sentiment in the second half of the week and placed further weight on the EUR. During Friday’s session, FX markets were more tentative given that talks are to resume on Saturday and as such, the slew of headlines on Friday slowed down somewhat as both parties now prepare their latest set of proposals to bring to the table on Saturday. Looking ahead, naturally focus will reside with the outcome of discussion on Saturday which begin at 1600BST, ahead of which German Chancellor Merkel has insisted that she aims to get a deal done before the market opens on Monday. One thing to bear in mind is that even if a deal is struck, any such agreement will need to make its way through both Greek and German parliaments which could provide another hurdle to proceedings. However, a creditor note on Friday suggested that if a deal is reached then an initial tranche of EUR 1.8bln could be disbursed which would be enough to cover the upcoming June 30th EUR 1.6bln IMF payment. Looking further afield next week, participants will also be presented with the latest jobs report from the US with the headline expected at 225k. This will naturally be closely watched given the Fed’s insistence that they remain data dependent and the suggestions by various Fed members that Fed rate lift-off could occur as soon as September.

0 0 votes
Notify of
0 评论
Inline Feedbacks
View all comments