Markets still waiting on a Grexit answer

Late night discussions between Greece and its creditors have yet to lead to any real progress in negotiations.

Euro notes
Source: Bloomberg

Euro traders set for directionless day

Many with little to no interest in either politics or economics will have found it hard to avoid commentary on Greece this week. Although it isn’t one of the larger nations in the eurozone, it is once again at the forefront of everyone’s minds.

Time is running out, and regardless of the fact that neither side can fully agree both fundamentally want the same thing, and that is for Greece to remain in the Union.

Today’s focus is on the latest Eurogroup meeting and the EU economic summit however, it is hard to believe that the focus won’t once again be on Greece. Rumours and counter rumours are likely to appear during the day ensuring that a clear sense of direction for EUR/USD is almost certain to be unachievable.

Cable stuck in limbo

Last week saw Federal Open Market Committee voting member Jerome Powell speaking, and his comments encouraged the markets to believe that the first US interest rate rise was unlikely to materialise before September and may even be later than that. Later on today we will hear from FOMC member Daniel Tarullo who will be taking part in a panel discussion on the US economy. The currency markets will be paying close attention to what he says as this will be a useful barometer on the thinking of the FOMC board.

GBP/USD appears to be in limbo at the moment as the sterling side of the equation watches the developments in Europe, conscious of the implications that the current negotiations will be having on its largest trading partner. The pace of the US recovery has cooled as has the UK equivalent, and the markets have gone from trying to gauge which economy is the stronger to which economy is the more resilient.

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