The markets continue to move and we are still seeing Sterling profiting from the uncertainty around other currencies. After a couple of days of US Dollar profit-taking and the Dollar being used as a safe haven, we have seen Cable (GBPUSD) start to rise a bit again. The riskier the market, the more people like the Dollar. When risk decreases so does the power of the Dollar.
Of course, we are in the midst of the unknown at the moment with Greece. However, there appears to be a wave of optimism as Greece appear to have blinked first and are looking to stay in the Eurozone and pay off their debts. This has not gone down too well amongst elderly Greeks who are going to see the retirement age increased. The Greeks will need extra funding from the ECB which is most likely to come from more Quantitative Easing. This is going to burden the Euro further, but if a deal does happen then we should expect the Euro to strengthen on the back of the “feelgood factor”.
Today, the Eurogroup ministers are meeting in anticipation of the Euro leaders summit over the next couple of days. Their remit is to have a deal ready to be signed off. The heads of the IMF, ECB and EU Commission are also said to be meeting today with PM Tsipras also likely to be in attendance to discuss whether the current reform proposals are comprehensive enough.
Whilst what is happening with Greece will continue to hog the headlines and sway the markets, we also have the hugely important GDP coming out of the US this afternoon.
Have a good day!
Posted in Daily Market News on Jun 24 2015