United States Dollar: Cable rallied yesterday morning as the Greek saga played out. The pair pretty much followed in the shadows of EUR/USD, if perhaps a bit reluctantly. German bunds rallied as investors grew more and more confident that a deal on Greece was imminent – this saw EUR/USD push higher through 1.13 and go on to trade to a high of 1.1377. In other news yesterday the Bank of England announced that it would be leaving monetary policy unchanged – a non-event as far as markets were concerned – but close to and around the time of the announcement GBP/USD started to fade. Again, it tracked EUR/USD lower on news that Greece would miss its loan repayment deadline and would instead bundle up the payment with other repayments due to its creditors at the end of the month. As far as markets were concerned, it was disappointing, but if Greece simply doesn’t have the money at the moment, what else can they do? Creditors are realising this and their language is becoming less and less aggressive. Simply put, a sensitive approach is required as any betrayal of the Greek electorate by PM Tsipras could well lead to his government being ousted in a snap election, which would then mean negotiations with creditors begin again from scratch.
We expect a range today in the GBP/USD rate of 1.5245 to 1.5450
Euro: EUR/USD whipsawed between 1.1377 and 1.1175 yesterday as the Greek story developed. The decision to delay today’s €300m IMF repayment is seeing Greek government bonds slump this morning. Meanwhile, Greek economy minister George Stathakis has been speaking this morning and has given an assurance that Greece won’t be leaving the euro. The rhetoric will no doubt continue today. EUR/USD is recovering in early Europe, off from its overnight lows, and it opens this morning in London at 1.1275. GBP/EUR remains on the back foot for now and trades at 1.3587.
We expect a range today in the GBP/EUR rate of 1.3550 to 1.3660
Aussie and Kiwi Dollars: The aussie and kiwi both fell yesterday during the late afternoon, dragged lower by the sell-off in EUR/USD and on the back of some better than expected US data which included revised nonfarm productivity and unit labour costs. There wasn’t any local data released overnight, except for Australian AIG Construction data and so both currencies have steadied over the last 12 hours or so. They remain weak vs. the pound and GBP/AUD and GBP/NZD open this morning at 1.9935 and 2.1515 respectively.
We expect a range today in the GBP/AUD rate of 1.9850 to 2.0050
We expect a range today in the GBP/NZD rate of 2.1400 to 2.1650
AUD: No data
EUR: No data
GBP: Consumer Inflation Expectations
NZD: No data
USD: Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m
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