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Greeks still dragging their heels

Greek bailout discussions take two steps forward, and then two back.

Euro notes
Source: Bloomberg

EUR/USD continues sideways trading

Will Greece default? Will it leave the eurozone? Will it leave the EU and will it have its own currency? These are the questions that currency traders have been asking themselves as the Greek saga continues to be played out in front of a watching world.

Regardless of how much the founding members might want the unity of the eurozone to remain intact, there is only so much leeway they can afford to give to Greece as the nation continues to stall on the inevitable changes it will have to make if it wants to remain in the eurozone.

Markets reacted to yesterday’s comments from the president of the Eurogroup, Jeroen Dijsselbloem. As encouraging as the phraseology may have been, it was hardly likely that he was going to say anything else as he and the group would not want to trigger a fresh run on cash withdrawals at Greek banks.

At least another 24 hours of lateral moves and uncertainty look inevitable for the euro as currency traders await further developments form Greece.

Spot FX EUR/USD chart

US data to drive cable direction

So far this morning we have seen fresh selling pressure on GBP/USD as the rarefied air up above $15850 has proven to be too rich for currency traders at the moment.

Today’s morning session looks like it will be the calm before the storm as this afternoon will bring a plethora of US economic data to the markets. Just after mid-day FOMC voting member Jerome Powell is due to speak, and he will be discussing the most appropriate timing for the US to start raising interest rates. This will be followed by monthly durable good figures flash manufacturing PMI data and new home sales figures.

As the perceived strength of sterling remains in limbo due to the eurozone shenanigans, it is once again left to the dollar to drive any moves.

Spot FX GBP/USD chart

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