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EUR/USD breaks above $1.1300

The dollar has spent the last 48 hours continuing to weaken against both sterling and the euro.

Euro and US dollar notes
Source: Bloomberg

Greece uncertainty leaves eurozone directionless

When talking about the euro at the moment it is almost impossible to do so without making reference to the events surrounding Greece and the question of where its future lies.

From the outside looking in many regions of the world must wonder why the eurozone group doesn’t just cut its losses and separate from Greece. Part of the reason why this has been something the founding nations have been so reluctant to entertain is because it would break the concept of the eurozone.

We still appear to be waiting for the Greeks to call for a referendum asking the voting public if they want to remain in the eurozone. Should this vote come in with a ‘yes’ then that would give Syriza a mandate to break its pre-election promises and become more flexible with the ongoing austerity demands being placed upon them.

While we wait for this to happen we look doomed to remain in this current holding pattern of uncertainty.

Spot FX EUR/USD chart

GBP/USD traders await Carney and Osborne comments

Wednesday evening will see both Mark Carney and George Osborne speaking to an audience of city power brokers. It is difficult to see what changes the Bank of England governor can bring to the table as the template of watch and see has been in place for some considerable time. The Chancellor on the other hand could view this as an ideal opportunity, just less than a month before the Summer Budget, to test the waters on a few new policies he and the Conservative government might consider bringing in front of the House of Commons.

The market reaction to the election has so far been broadly positive as the general consensus that the Conservative party was more pro-business than the alternatives has given the markets a sense of calm. This honeymoon period might be about to be tested as further austerity measures are required.

Regardless of the last 48 hours climb higher, GBP/USD's recent moves could easily be wiped out depending on what the Chancellor infers in his speech Wednesday evening.

Spot FX GBP/USD chart

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